The Australian Financial Complaints Authority (AFCA) has permanently terminated the membership status FX broker Union Standard International Group Pty Ltd (USGFX), the complaints authority said today.
As such, the commission noted that it will not be able to process any new complaints from USGFX clients, following its expulsion from its roster as of November 12. Moving forward, those who have outstanding claims against the embattled broker can directly engage with the liquidator and lodge a proof of debt with supporting documents.
“From 12 November 2021 onwards, AFCA cannot accept any more complaints against Union Standard International Group Pty Ltd. This does not affect complaints submitted to AFCA before that date. From April 2020, AFCA has paused complaints against insolvent financial firms while awaiting detail of the scope and timing of a Compensation Scheme of Last Resort (CSLR). On 16 July 2021 the Federal Government released the exposure draft legislation to establish the Compensation Scheme of Last Resort (CSLR),” the AFCA statement further reads.
The Australian arm of USGFX has collapsed into administration amid an investigation by the corporate watchdog into its trading platforms. The cancellation of USGFXs AFS licence followed on from the broker being ordered to enter into liquidation by the Federal Court of Australia.
ASIC preparing to flex its new regulatory muscles
Opened its doors for business more than a decade back, USGFx is one of the oldest foreign exchange brokers in the Pacific Rim. The company has its headquarters in Sydney, but with branches in Auckland, Shanghai and Hong Kong.
The Australian financial watchdog has recently kicked off its largest swipe against the sale of risky investments to retail investors, but industry players are claiming that they already operate in compliance with most of these restrictions.
The corporate regulator has been preparing to flex its new regulatory muscles after a recent review found 80 percent of binary traders and 72 percent of clients who traded CFDs lost money. Retail traders lost nearly $490 million and $1.5 billion a year in trading binary options and CFDs, respectively, according to ASIC data.