FXAsia Updates Website Disclosure to Clarify the Services it may Offer

Following concerns raised by ASIC, OTC derivative issuer FXAsia Pty Ltd (AFSL No. 418036) (FXAsia) has taken steps to update disclosure on its website (https://www.fxasia.com/).

 The updates will inform  potential clients that FXAsia cannot currently issue OTC derivatives to retail investors. Despite holding retail license authorisations, FXAsia is not currently in a position to issue these products as it does not currently meet some of the relevant financial resource requirements.

To assist in clarifying the types of services they provide, FXAsia has also removed a Product Disclosure Statement and Financial Services Guide from their website and improved disclosure clearly stating that their services are for wholesale investors only.

ASIC was concerned that retail investors may mistakenly believe that as a consequence of FXAsia having an Australian Financial Services (AFS) licence authorisation allowing it to provide services to retail investors, FXAsia was in a position to issue OTC retail derivatives and comply with the relevant financial resource requirements. 

Licensees which provide those types of services must comply with ASIC Class Order 12/752 Financial requirements for retail OTC derivative issuers, which requires a licensee to hold a minimum of $1 million Net Tangible Assets (NTA) or 10% of the average revenue of the licensee, whichever amount is greater. However, the ASIC Class Order requiring this NTA only applies to licensees that have an actual or contingent liability to retail investors. At the time of ASIC's discussions with FXAsia, they had decided to focus their services on wholesale investors only and were not in a position to meet the minimum NTA requirement.

ASIC Commissioner Cathie Armour said, 'Licensees need to ensure compliance with all their obligations including those licence authorisations which carry with them additional protections for retail investors. If a licensee is not in a position to provide those protections, they should not offer those financial services and make that clear to investors.'