The Australian Securities and Investments Fee (ASIC) has cancelled the operational license of the now-defunct Prospero Markets, which provided contracts for variations (CFDs) devices to retail merchants.
Prospero Markets Misplaced AFS License
The cancellation of the Australian Monetary Providers (AFS) license, efficient from 25 September, got here after the regulator suspended it in December 2023. The dealer is at the moment below liquidation after a federal court docket, upon the appliance of ASIC, ordered the wind-up of its enterprise on “simply and equitable grounds.”
“Below the Companies Act, ASIC could droop or cancel an AFS license if the licensee is being wound up or if the licensee has ceased to hold on a monetary providers enterprise,” the regulator famous.
Nevertheless, the brokerage can nonetheless attraction ASIC’s choice.
Final month, ASIC additionally cancelled FXOpen’s AFS license, citing critical considerations concerning the “inadequacy of its human assets to offer monetary providers and to hold out supervisory preparations.”
Hyperlinks to a Large Cash Laundering Chain
Prospero Markets obtained the AFS license in late 2012, authorizing it to supply over-the-counter derivatives and overseas alternate contracts to retail and wholesale shoppers.
Nevertheless, ASIC’s motion towards the dealer got here after an investigation that started final 12 months when Australian police charged former officers and accountable managers of the brokerage with cash laundering in October 2023. These costs had been linked to the Changjiang Foreign money Trade cash remitting chain, which was accused of laundering practically $229 million over three years.
In its investigation into the brokerage enterprise, ASIC discovered a “broad vary of considerations concerning the administration of Prospero’s enterprise.” The regulator highlighted potential breaches of the dealer’s licensing circumstances and its obligations as an issuer of over-the-counter derivatives.
Whereas suspending its license final December, the Australian regulator cited the dealer’s failure to submit annual monetary statements and audit studies on time.
“ASIC has specified that till 25 March 2026, Prospero Markets should proceed to be a member of AFCA, proceed to have preparations for compensating retail shoppers, together with the holding {of professional} indemnity insurance coverage cowl, and should adjust to the ASIC Consumer Cash Reporting Guidelines 2017,” the newest announcement added.
This text was written by Arnab Shome at www.financemagnates.com.
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