FX broker Advanced Markets clarifies its AFS licence 

ASIC_regulator

Following concerns raised by ASIC, Advanced Markets Ltd (Advanced Markets) has agreed to make changes to its website (www.advancedmarketsfx.com). The changes relate to statements which may have been misunderstood as implying that ASIC regulates all financial services provided by Advanced Markets, including those which are not carried on in Australia.

Advanced Markets is incorporated in the Cayman Islands and is a registered foreign company under the Corporations Act. Advanced Markets holds an Australian financial services (AFS) licence. According to its website, Advanced Markets’ physical address is in the United States and it provides financial services to clients globally.

The Advanced Markets website contained many statements emphasising the requirements and protections of its AFS licence, including:

  • The heading “Advantages of working with an ASIC registered company,” followed by claims about ASIC regulation and protection.
  • Paragraphs on handling of client money, including the statement “Client funds are held in accordance with ASIC requirements.”
  • The requirement for all applicants to state that they qualify as a wholesale client under the Corporations Act, under its Account Application webpage.

These statements were not accompanied by an appropriate clarification that these AFS licence requirements and protections do not apply to financial services provided outside Australia.

ASIC was concerned that such statements may confuse potential foreign clients to believe that the remit of ASIC’s regulation of the financial services business carried on by Advanced Markets under its AFS licence extends to financial services conducted by Advanced Markets that have no link to Australia.

The AFS licensing regime only covers financial services carried on in Australia. Where an entity such as Advanced Markets, is based overseas and is providing financial services to clients outside Australia, these services are not being carried on in Australia.

‘ASIC expects that any content or material published by a foreign company mentioning that the company holds an AFS licence to be clear about the reach of the licence,’ ASIC Commissioner Cathie Armour said. ‘Any limitations of the licence that are not obvious to investors should be clearly disclosed to avoid confusion or misunderstanding.’

Financial service providers must also ensure that they are appropriately licensed in each jurisdiction in which they operate. An AFS licence does not permit AFS licensees to offer financial services in other jurisdictions where approval may be required from the local regulatory authority.

Source: ASIC – FX broker Advanced Markets clarifies its AFS licence

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