ASIC Flags Two Brokers Amid Unauthorised Soliciting and Misconduct Concerns

The watchdog has warned of RockSmith Options and put OpenMarkets Australia under its watchful eye.

The Australian Securities and Investments Commission (ASIC) has issued a warning to the public and investors on the actions of broker RockSmith Options, according to an ASIC advisory issued today.

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RockSmith Options, which operates online via www.rocksmithoptions.com, is located at 90 New Bond Street, London, UK. The company, in its own words, provides a “highly personalised service and a level of expertise unrivalled in the financial services industry with well thought-out trading strategies, performance management and an unparalleled dedicated customer care system that spans across all products, services and geographical locations”.

However, according to ASIC, the brokerage has made unsolicited calls and sent emails about investing, financial advice, credit and loans to potential Australian investors when it does not hold a current Australian Financial Services (AFS) licence or an Australian Credit licence from ASIC.

A glance at the website reveals it is currently inaccessible, for reasons which are likely to be linked to ASIC’s investigations, so the operational status of the brokerage is presently unclear.

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OpenMarkets

In a second case involving ASIC, the watchdog today imposed additional conditions on the Australian financial services licence of OpenMarkets Australia.

Those providing direct market access to clients should be vigilant in ensuring they maintain appropriate controls.

OpenMarkets is a Melbourne-based market participant trading on ASX, Chi-X, NSX and SIMVSE and an ASX Clearing and Settlement Participant. The company trades in equities, exchange traded funds (ETFs), exchange traded options (ETOs) and warrants and is licensed to provide personal and general advice to both wholesale and retail clients.  

Although the imposition of additional conditions does not constitute a ban, the action follows surveillance activities which identified concerns in OpenMarkets’arrangements for identifying and preventing potential market misconduct, ineffective pre-trade and post-trade monitoring arrangements, reconciliation of its client trust accounts and supervisory arrangements, organisational and technological resourcing.

The licence conditions require OpenMarkets to appoint an independent expert to review the organisation’s arrangements, identify any deficiencies, and recommend enhancements appropriate to the business by March 2017.

ASIC Commissioner Cathie Armour said: “Market participants have an important gatekeeper role. Those providing direct market access to clients should be vigilant in ensuring they maintain appropriate controls to ensure that trading messages do not interfere with the efficiency, fairness, order or integrity of the market. These controls include appropriate filters and a robust trade monitoring framework”.

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