FXOpen AU Pty Ltd, the Australia-based operation of FXOpen’s CFD brokerage business, has announced its intent to appeal the Australian Securities and Investments Commission (ASIC)’s decision to cancel its Australian Financial Services (AFS) licence.
The regulatory action follows an investigation by ASIC, which raised serious concerns regarding FXOpen AU’s ability to meet key licensing requirements.
ASIC says FXOpen AU has no ‘key person’ nor adequate human resources
ASIC’s investigation into FXOpen AU revealed multiple compliance failures, including the company’s alleged inability to maintain adequate human resources to deliver financial services and supervise operations. The regulator also claims that FXOpen AU failed to comply with its obligations as an AFS licensee, including:
- maintaining competence to provide financial services covered by the licence
- complying with the ‘key person’ condition on its licence, and
- complying with financial services laws.
The AFS licence 412871, initially granted in December 2011, allowed FXOpen AU to issue contracts for difference (CFDs), which are leveraged derivative products that allow clients to speculate on the price movements of underlying assets such as foreign exchange, stocks, commodities, and crypto-assets.
ASIC justified the cancellation by stating that FXOpen AU’s continued non-compliance posed a risk to existing and future clients. The regulator’s decision also aligns with its broader efforts to promote fairness, professionalism, and investor confidence in the financial system.
ASIC’s action against FXOpen AU is part of its broader crackdown on retail over-the-counter (OTC) derivatives issuers. The regulator has taken enforcement measures against several other firms in the sector for similar compliance breaches. In addition, ASIC has extended its CFD product intervention order until May 2027 to reduce the risks associated with high-leverage products for retail clients.
As part of its regulatory mission, ASIC has also obtained significant penalties against non-compliant firms and overseen compensation payouts to retail investors affected by misconduct in the OTC derivatives market.
“The licence was cancelled before the company had the opportunity to fully resolve all the issues”
In response to the cancellation, Jafar Calley, CEO of FXOpen AU, expressed disappointment. He confirmed that the company had been working closely with ASIC over the past few months to address the concerns raised.
“FXOpen AU has been working with ASIC over the past few months to address their concerns related to the licence Unfortunately, the licence was cancelled before the company had the opportunity to fully resolve all the issues identified. FXOpen AU intends to continue its efforts to address these concerns and will be appealing ASIC’s decision, with the aim of having the licence reinstated.”
FXOpen AU’s appeal will be closely monitored, as the outcome could have implications for the wider CFD and forex trading industry in Australia. The company’s ability to resolve the issues identified by ASIC will be critical in determining whether it can regain its AFS licence.
