The corporate regulator has cancelled the licence of a foreign exchange provider after an investigation found it was making false and misleading statements.
ASIC has cancelled the Australian financial services licence of Rainbow Legend Group for "failing to compy with its obligations".
A statement by the regulator said the move is part of ASIC's "ongoing crackdown on the margin FX industry".
"ASIC’s investigation found [Rainbow Legend Group] falsely promoted, on a number of websites, an insurance compensation scheme for clients of up to $2.5 million," ASIC said.
"The scheme does not exist in Australia, and would not apply to clients based in Australia or to services covered under Rainbow Legend’s licence."
The regulator also took issue with the use of its logo on Rainbow Legend's website, which "could have led clients to wrongly believe the company was in some way endorsed or approved by ASIC".
"The company had also not complied with a number of its reporting obligations, including failing to lodge financial statements for the years ended 30 June 2013 and 30 June 2014, and an auditor’s report for two financial years," ASIC said.
ASIC commissioner Greg Tanzer said it was important to emphasise that Australian financial services licences only cover financial services offered in Australia.
"It is also vital an entity holding a AFS licence complies with their reporting requirements to ensure users of financial reports, such as creditors and investors, have the proper information to make informed decisions."
EXCLUSIVE Now that he’s secured his leadership, Prime Minister Scott Morrison has a major opportunity to secure the future viability of t...
A report from prudential regulator has found that CBA is not the only institution that suffers from an ill-defined culture and hazy account...
The banking regulator has announced that it will give banks greater flexibility to their own serviceability floors in a move that could open...