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ASIC temporarily suspends the license of Direct FX

 

Australia’s regulator, the Australian Securities & Investment Commission (ASIC) has temporarily suspended the license of the forex broker Direct FX. According to the Commission’s statement on its website, the reason for the measure is that Direct FX Trading Pty Ltd. has failed to maintain financial soundness, and comply with some with its duties.


More specifically, the company failed to comply with the applicable capital adequacy requirements and maintain net tangible assets of at least $1,000,000. It also did not submit an audit report covering certain important matters and did not replace key persons named on its licence. This gives ASIC reasons to believe that Direct FX is likely to contravene its general obligations as a licensee under the Australian Corporations Act.


Direct FX was in breach of important financial conditions of its AFS licence aimed at protecting investors from the higher operational and credit risks posed by the retail OTC derivative sector,’ commented Commissioner Cathie Armour. - ‘When ASIC was trying to conduct its enquiries, the entity did not cooperate in a timely and efficient fashion that we would expect of licensees, and failed to comply with ASIC directions,’ she added.


As a result, the Australian financial services (AFS) licence of Direct FX is suspended for a minimum of ten weeks and up to six months, depending on whether the key criteria are satisfied. To minimise the impact of the suspension on its clients, the broker will be able to close out positions of existing clients. Furthermore, it will be required to maintain its membership of an external dispute resolution scheme and adequate professional indemnity Insurance.


DirectFX is an Australian broker, which offers trading in a great variety of financial instruments on two different platforms: the world’s leading MT4 and CQG. The company is in business since 2006 and provides Straight-Through-Processing (STP) trading environment.

 

TAGS: ASIC  DirectFX  Australia  license suspension  regulation 
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US CFTC, NFA MT4, Web,
in-house
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US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Belize CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
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Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
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