New Zealand’s FMA Defends FXBTG De-Registration Appeal
- The High Court ruled in the regulator’s favor to de-register FXBTG from the FSPR.
The Financial Markets Authority (FMA) of New Zealand announced this Monday that it has yet again managed to successfully defend a direction to de-register foreign exchange firm FXBTG Financial Limited, with the High Court ruling in the regulator’s favor.
Earlier this year in June, the New Zealand regulator directed the Companies Office, as the registrar of the Financial Service Providers Register (FSPR), to de-register FXBTG Financial Limited.
According to the statement provided by the watchdog, FXBTG was registered in New Zealand, but it wasn’t actually providing any financial services to New Zealand customers. Instead, the company was trying to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term New Zealand’s reputation, the FMA said.
FXBTG had appealed the FMA’s direction. However, Justice Francis Cooke dismissed the appeal. In his judgment, Cooke said that sections of the Financial Service Providers Act had been inserted to deal with entities that register on the FSPR to “artificially claim a reputational benefit by association with the financial services regime operated under New Zealand law.”
In the judgment, Cooke noted that all of the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term firm’s clients were based overseas: “FXBTG technically engages in financial services within the meaning of the Act, but only in an entirely notional way.
“It has a single employee operating a computer in an apartment in Auckland, and on that basis, it has represented it is regulated under New Zealand securities law. That creates a misleading impression.”
FXBTG is the fourth win for FMA
This is the fourth time the New Zealand regulator has successfully defended an appeal against a direction to de-register, according to Nick Kynoch, FMA General Counsel. The other cases include Excelsior Markets Limited, Innovative Securities Limited, and Vivier & Company Limited.
“This case demonstrates the lengths some firms are willing to go to stay registered on the FSPR and take advantage of New Zealand’s reputation,” added Kynoch. “Registration on the FSPR does not necessarily mean that an entity is regulated by the FMA. However, where we see entities exploiting registration we won’t hesitate to use our powers.”
“The FMA has to preserve the integrity of New Zealand’s financial markets so it’s important that we defend these cases. We’re pleased that this ruling further reinforces the approach that the FMA has taken,” he continued.
The Financial Markets Authority (FMA) of New Zealand announced this Monday that it has yet again managed to successfully defend a direction to de-register foreign exchange firm FXBTG Financial Limited, with the High Court ruling in the regulator’s favor.
Earlier this year in June, the New Zealand regulator directed the Companies Office, as the registrar of the Financial Service Providers Register (FSPR), to de-register FXBTG Financial Limited.
According to the statement provided by the watchdog, FXBTG was registered in New Zealand, but it wasn’t actually providing any financial services to New Zealand customers. Instead, the company was trying to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term New Zealand’s reputation, the FMA said.
FXBTG had appealed the FMA’s direction. However, Justice Francis Cooke dismissed the appeal. In his judgment, Cooke said that sections of the Financial Service Providers Act had been inserted to deal with entities that register on the FSPR to “artificially claim a reputational benefit by association with the financial services regime operated under New Zealand law.”
In the judgment, Cooke noted that all of the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term firm’s clients were based overseas: “FXBTG technically engages in financial services within the meaning of the Act, but only in an entirely notional way.
“It has a single employee operating a computer in an apartment in Auckland, and on that basis, it has represented it is regulated under New Zealand securities law. That creates a misleading impression.”
FXBTG is the fourth win for FMA
This is the fourth time the New Zealand regulator has successfully defended an appeal against a direction to de-register, according to Nick Kynoch, FMA General Counsel. The other cases include Excelsior Markets Limited, Innovative Securities Limited, and Vivier & Company Limited.
“This case demonstrates the lengths some firms are willing to go to stay registered on the FSPR and take advantage of New Zealand’s reputation,” added Kynoch. “Registration on the FSPR does not necessarily mean that an entity is regulated by the FMA. However, where we see entities exploiting registration we won’t hesitate to use our powers.”
“The FMA has to preserve the integrity of New Zealand’s financial markets so it’s important that we defend these cases. We’re pleased that this ruling further reinforces the approach that the FMA has taken,” he continued.