The (FMA) of New Zealand has suspended the derivatives issuer licence of AxiCorp for “material breaches” of the Financial Markets Conduct Act 2013, the regulator announced this Thursday.
AxiCorp Financial Services Pty Limited, trading as AxiTrader, is , headquartered in Sydney Australia. The New Zealand regulator has accused the firm of three main breaches.
Those are, not having a compliant Product Disclosure Statement or Disclose register entry, not lodging audited financial statements and not having a qualified auditor for its processes, procedures and controls within four months of its balance date.
In addition, the FMA also states that AxiCorp failed to notify the regulator when it (CFO), which contravened its licence conditions.
“The FMA considers that AxiCorp has demonstrated that it does not have adequate systems, processes, or resources in place to ensure compliance with the Financial Markets Conduct Act, or to effectively perform services under a licence,” the statement said.
AxiCorp responds to FMA
Responding to the FMA, AxiCorp released its own statement which said: “Recently we identified that our Product Disclosure Statement for NZ clients was not fully compliant with requirements under NZ legislation.
“We promptly self-reported the issue to the NZ FMA and stopped accepting any new retail clients or new positions in this jurisdiction. Affected clients were also promptly informed. Other issues were also identified in relation to the lodging of financial statements and notification of change of senior personnel. We have been in contact with the NZ FMA to ensure they are informed as we remedy the identified issues.
“Despite our best endeavours, the NZ FMA has made the decision to formally suspend our licence. While we are disappointed, we respect the NZ FMA decision and are working very closely with them to provide confidence such that the suspension may be lifted. To this end, a significant amount of remedial work has already occurred.”
AxiCorp’s licence, which was granted from the New Zealand regulator back in mid-2018, will remain suspended until the FMA is satisfied that the abovementioned concerns have been addressed.
During the suspension, which is effective from the 29th of July, 2019, AxiCorp can continue to act as a derivatives issuer, however, it can only do so to enter into derivatives with existing clients in order to close out any open positions it has with them.
FMA measures will have minimal impact on AxiCorp business
According to AxiCorp, New Zealand clients of the broker will still be able to manage their current positions and access their funds as normal. Overall, less than 20 clients have been impacted by the suspension.
“While we remain committed to the New Zealand market, this does not currently contribute significantly to our global revenue, therefore the suspension will have minimal impact on the financial performance of AxiCorp,” the Australia-headquartered broker continued.
“We continue to see double-digit growth in active clients, trading volume, revenue and EBITDA from our global business – a reflection of the quality and transparency of service we provide to our valued clients.”