The Australian Securities and Investment Commission (ASIC) announced today that it has cancelled IMS FX Services’ (IMS FX) Australian Financial Services Licence (AFS).
The decision follows the rejection of an application from IMS FX by the Administrative Appeals Tribunal (AAT) which sought to prevent ASIC from amending the public AFS licence register and recording that it had cancelled IMS FX’s AFS licence.
On 25 March 2015, IMS FX applied for an AFS licence which was granted on 16 September 2015. Subsequently, ASIC learned that the controllers of the licensee had reached an agreement on 7 August 2015 that IMS FX would be sold shortly after the licence was granted.
As the licence application did not disclose this intention to change ownership, directorships, intended business activities and resources, ASIC convened a hearing on 22 December 2015 to determine whether the licence should be cancelled.
The hearing took place on 3 February 2016 and an ASIC delegate found that the application lodged with ASIC was misleading in a material way and decided to cancel the licence.
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IMS FX was informed of the outcome and then sought to appeal ASIC’s decision which was then rejected.
The AAT said: “In the circumstances, I am satisfied that there is considerable risk to the public if the Decision is stayed. Furthermore, there is, as submitted by ASIC, a further aspect of the public interest which lies in the general deterrent effect of ASIC publicising the fact that an AFSL obtained by means of a materially misleading application has been cancelled – which supports the role of ASIC in carrying out its function of protecting the public.’
In light of the AAT’s decision, the AFS licence register will now reflect that IMS FX’s AFS licence has been cancelled.
Deputy Chairman Mr Peter Kell said: “It is paramount that any person seeking to obtain an AFS license submits an application that accurately reflects the facts and circumstances as well as the financial services business the applicant intends to carry on under the license”.
The decision acts as a reminder to applicants that if any material circumstances concerning the application change, they have a responsibility to disclose this to ASIC.
A failure to do so risks ASIC taking regulatory action, including, as in this instance, ASIC deciding to cancel the licence.