ASIC Suspends Retail OTC Derivative Licenses of Several Companies With Change of Shareholding

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ASIC Suspends Retail OTC Derivative Licenses of Several Companies With Change of Shareholding

By Lex Yaranu | Friday, August 28th, 2020

The Australian Securities and Investment Commission (ASIC) has once more exerted its regulatory control of the binary options market by suspending the licenses of several companies that have changed their shareholding structure outside of the guidelines governing the possession of the Australian Financial Services license.

One of the affected companies is a provider of retail Over the Counter (OTC) derivative trading, Australian Capital Markets Advisory Services Pty Ltd (ACMAS). ACMAS changed all directors and shareholders details after the company became a wholly owned subsidiary of another company, Formax International Market Limited. The new company could not demonstrate full compliance with many of ASIC’s licensing requirements and had its OTC operations shut down by the regulator.

Presently only a suspension of its current license is in place. ACMAS has been given until 30 October 2020 to prove its readiness to recommence its financial services business with demonstration of all required obligations necessary to obtaining an Australian Financial Services license, or face the possibility of having the license suspension converted to a complete revocation.

Speaking on the matter, ASIC Commissioner Cathie Armour commented on the noted increase in retail OTC derivative providers that purchase moribund companies with existing ASIC licenses. She noted that the new management brought in to reflect the ownership change are often not in a position to recommence providing services in a manner that is compliant with required ASIC regulations.

Speaking further, Armour said that ASIC has reviewed the situation and views it purely as a means that these new companies are using to inappropriately bypass ASIC’s stringent AFS Licence application processes. She reiterated that ASIC expects all new companies to comply with the regulatory obligations on AFS licenses as these also apply to previously licensed companies with new ownership, warning that failure to comply with Australian licensing obligations will attract suspension of such previously issued licenses or total cancellation.

ASIC is empowered by law to immediately suspend or cancel an AFS license where a financial services company previously issued such a license stops operations. ASIC can also grant hearings to affected companies and if there is reason to believe that the licensee has not complied with ASIC obligations, such a license will remain suspended or canceled.

Where there has been a change of ownership, companies with AFS licenses (including binary options companies) are obligated to inform ASIC in writing of full particulars of any change in management or shareholding within 10 business days following the change.

Binary options traders will therefore need to be very vigilant to any change of ownership of companies that they trade with. Change of ownership is very common with binary options brokerages in Cyprus.

Changing shareholder details

This page outlines the shareholder details that you need to keep updated with ASIC. Shareholders can sometimes be referred to as ‘members’.

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Changes to shareholder details can be made online. If you haven’t registered for online access, see our online services page.

Changing a shareholder’s address

You can change a shareholder’s address using our online services.

To change a company’s registered office address or principal place of business, see Changing company addresses.

To change company officeholder details, see Changing officeholder details.

Changing a shareholder’s name

You can change a shareholder’s name online.

Changing a shareholder’s beneficial status

You can change a shareholder’s beneficial status online.

Transferring shares

You can transfer shares between shareholders online.

Changes to your company

Here we explain the updates you can make to your company details online.

We’ve also included useful links to make other changes to your company.

For information on how to wind up your company, see Closing your company.

Changes must be made online

From November 2020, changes to company details must be made online. The paper Form 484 is no longer available.

You need to register to use our online services before you can make any changes. There’s no fee to change your company details online.

Once we’ve received your changes online, your details will be updated within one business day.

To make changes to company details:

  1. Register for online access using your company’s corporate key
  2. Log in to our online services with your company’s ACN or ABN
  3. Enter your username and password
  4. Select ‘Start new form’ and select ‘Change to company details’

All correspondence is sent to you electronically once you’ve registered for online services. You will receive an email alert when the correspondence is available. This includes your company annual statement.

Common changes to company details

The Changes to company details (previously Form 484) online transaction can be used for the following:

Help changing company details

If you are having trouble making changes to your company details, see our user guides for step-by-step instructions.

How long do I have to make changes to company details?

You need to submit a Changes to company details (previously Form 484) transaction within 28 days of the change occurring. Otherwise, late fees apply:

  • $80 for up to one month late
  • $333 for over one month late

Other company changes

Other company changes you can make include:

Changes to company details can be submitted through our online services. Please ensure you register for online access and make all changes in the time allowed.

ASIC suspends OTC derivatives licence

Over-the-counter (OTC) derivatives provider Australian Capital Markets Advisory Services has had its Australian financial services licence suspended by ASIC.

The suspension of Australia Capital Markets Advisory Services’ (ACMAS’s) licence, effective until 30 October 2020, came about after a change of all directors and shareholdings in the company.

In June 2020 ACMAS became a wholly owned subsidiary of Formax International Market Limited.

According to ASIC, the new management of the company was “unable to demonstrate it was fully compliant with many of the AFS licensing requirements”.

“If ACMAS is unable to demonstrate prior to [30 October 2020] that it is in a position to recommence its financial services business, including demonstrating its ability to meet the obligations that would apply to it as the holder of an AFS licence, consideration will be given to cancelling the licence entirely,” ASIC said.

ASIC commissioner Cathie Armour said the regulator has seen an increase in retail OTC derivative providers purchasing companies that already hold a licence but that have ceased providing financial services.

“The new management are often not in a position to recommence providing services that are compliant with Australian obligations for an extended period of time,” Ms Armour said.

“More generally we would have concerns if new entrants to this market were trying to inappropriately bypass ASIC’s stringent AFS licence application processes.

“Regulatory obligations on AFS licensees continue to apply after the change of control. Any entity that is unable to comply with Australian licensing obligations risks having its licence suspended or cancelled,” she said.

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