Australian appeals body allows ASIC to deregister IMS FX amidst delicense appeal

Australian appeals body allows ASIC to deregister IMS FX amidst delicense appeal

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The Administrative Appeals Tribunal (AAT) has rejected the objection of forex broker IMS FX Services Pty Ltd., doing business as IMS FX, concerning the decision of the Australian Securities and Investments Commission (ASIC) to record the license cancellation it the Australian financial services (AFS) register, the financial regulator said on Thursday.

As a result of the AAT’s decision, the AFS license register will now reflect that IMS FX’s AFS license has been canceled, the regulator noted.

IMS FX obtained an ASIC license in mid September 2015. Shortly before that, the broker’s controllers had entered into an agreement to sell it after it get licensed, of which the ASIC had not been informed in the license application. As a result, in March 2016 the ASIC determined that the application it received was misleading and decided to cancel the license. The same month, IMS FX appealed the regulator’s decision and sought to defer the effect of ASIC’s cancellation order and confidentiality orders.

“In the circumstances, I am satisfied that there is considerable risk to the public if the Decision is stayed. I consider that there is considerable merit in ASIC’s submission that the asserted misleading character of the application made by the Applicant goes to the heart of the risk to the public of allowing the Applicant to continue under its AFS,” the AAT said, as cited in ASIC’s notice. “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.”

The ASIC’s decision to cancel the license of IMS FX is yet to be addressed by the AAT.

“It is paramount that any person seeking to obtain an AFS licence 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 licence,” said Peter Kell, ASIC deputy chairman. “This should be a salient reminder to applicants that should any material circumstances surrounding the application change, the applicant has a responsibility to disclose this to ASIC to ensure that ASIC’s decision is made on a fully informed and accurate basis. A failure to do so risks ASIC taking regulatory action, including, as in this instance, ASIC deciding to cancel the licence,” he added.

IMS FX is a unit of IMS United Financial Services Group, which is also active in the US, the UK, and China. It offers online trading in forex, contracts for difference (CFDs), commodity futures and precious metals.

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