Clarification

Advanced Markets Prompted by ASIC to Clarify License Function

The regulator insisted to make clear that it is responsible for the appropriate conduct only for residents of Australia

The Australian Securities and Investments Commission has been in contact with Advanced Markets concerning changes to its website. According to an announcement made by the Australian regulator, some statements may have implied that ASIC regulates all financial services provided by Advanced Markets. ASIC has indicated in its communique that services that are not provided in Australia are beyond its jurisdiction.

Despite being incorporated in the Cayman Islands, Advanced Markets is also registered as a foreign company under the Australian Corporations Act. The brokerage has an Australian financial services (AFS) license.

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The Advanced Markets website states that the company has a physical address in the United States and provides financial services to clients worldwide.

ASIC has highlighted some phrases which could have caused clients outside of Australia to believe that their interests are protected by a regulatory body:

The heading “Advantages of working with an ASIC registered company,” followed by claims about ASIC regulation and protection.

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Paragraphs on handling client money such as, “Client funds are held in accordance with ASIC requirements.”

The requirement for all applicants to state that they qualify as a wholesale client under the Corporations Act, in the account application webpage.

ASIC regulated brokers that provide services outside of Australia and not incorporated in the country are not supervised by the Australian regulator.

ASIC expects that any content or material published by brokers be clear about the reach of the licence.

Commenting in the announcement, ASIC Commissioner Cathie Armour said, “ASIC expects that any content or material published by a foreign company mentioning that the company holds an AFS license to be clear about the reach of the licence. Any limitations of the licence that are not obvious to investors should be clearly disclosed to avoid confusion or misunderstanding.”

Financial service providers must also ensure that they are appropriately licensed in each jurisdiction in which they operate. An AFS licence does not permit AFS licensees to offer financial services in other jurisdictions where approval may be required from the local regulatory authority.

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