The suspension of Australia Capital Markets Advisory Services’ (ACMAS’s) licence, effective until 30 October 2015, came about after a change of all directors and shareholdings in the company.
In June 2015 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 2015] 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.
