Australia financial regulator ASIC has announced that it has cancelled the Australian financial services (AFS) license of retail over the counter (OTC) derivatives issuer XTrade.AU Pty Ltd (XTrade).
XTrade offered clients opportunities to trade in contracts for difference (CFDs) and foreign exchange contracts (FX contracts).
ASIC said that it cancelled XTrade’s AFS license after its investigation found that several vulnerable clients were encouraged to trade in CFDs in circumstances where they could not afford to do so or had limited trading experience resulting in significant losses to some consumers.
ASIC’s investigation found that between June 2018 and September 2022, XTrade failed to comply with its general obligations as an AFS licensee and:
- engaged in unconscionable conduct;
- did not take reasonable steps to ensure that its representatives complied with financial services laws;
- did not have adequate arrangements…
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