AvaTrade has settled allegations by the Alberta Securities Commission (ASC) that it was operating as an unregistered entity in violation of a Canadian province’s securities laws.
According to a statement by the Alberta Securities Commission (ASC), Ava Trade Ltd. (Ava Trade) operated online trading platforms that allowed Alberta residents to trade contracts for difference (CFDs on cryptocurrencies, forex, equities, and commodities.
The ASC said that the settlement resolves allegations that AvaTrade’s British Virgin Islands-regulated subsidiary violated Alberta securities law by issuing and distributing these products without a prospectus. The watchdog explained that the brokerage did not specifically target local investors. It added that even though AvaTrade ran afoul of securities laws, the misconduct resulted from some degree of inadvertent behavior, and staff found no evidence of dishonest conduct.
“Ava Trade was proactive and collaborative throughout the resolution of this matter. The company is receiving credit for exemplary cooperation under the Policy in the terms of this Agreement,” the ASC said.
AvaTrade has agreed to pay an administrative penalty worth $30,000 and to disgorge $213,428.00 representing its net revenue from the trades made by the province’s residents.
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The settlement with Ava Trade involved an acknowledgment that it had breached the registration and prospectus requirements, meaning that it had to admit to the regulator’s allegations.
Between May 2015 and August 2018, Ava Trade opened approximately 372 accounts for Alberta investors. During this period, the company generated more than $202,000 in revenues from swaps, fees, and spreads in the Alberta accounts.
‘No evidence of dishonest conduct’
Aside from the monetary settlements, Ava Trade agreed with the ASC to implement internal controls and procedures to prevent Alberta residents from opening accounts. Among other procedures, the company will transfer all Canadian clients to a local broker, as well as restricting traffic from Canada to its websites.
AvaTrade also confirmed that it complied with the ASC and closed all of its Canadian client accounts and liquidated their trades by November 14, 2018.
Historical Issues Closed
Finance Magnates reached out to Ava Trade CEO Dáire Ferguson, who replied, “AvaTrade, as one of the most regulated brokers in the industry, continues to be at the forefront of regulation. As part of that goal, when we announced our IIROC approved collaboration with the Friedberg Mercantile Group in Canada, was to close any historical issues with the local regulators – which we have successfully now completed (‘under exemplary cooperation with the authorities’). As such – AvaTrade continues to service all Canadian clients via Friedberg Direct and will continue to do so for the long term!” Find out more about Friedberg Direct powered by AvaTrade technology at www.avatrade.ca