Cyprus-based forex brokerage IronFX Global has removed references from its website improperly suggesting the broker is regulated by the Australian Securities and Investments Commission (ASIC), the Australian financial watchdog said on Thursday. Information included in an IronFX Global disclosure document has also been removed since it gave the impression the broker is regulated by the ASIC.
This happened after the ASIC asked the Australian unit of the broker to remove all references improperly suggesting its Cypriot parent is regulated by the ASIC.
IronFX Global is neither licensed nor otherwise regulated by ASIC, the watchdog said. The Australian arm of the broker holds a license from the ASIC, which only applies for services provided by the Australian company, not by its Cypriot parent or any other group company.
IronFX Australia has also updated its product disclosure statement to include information about its hedging agreements and to clarify its sole hedging counterparty is its parent company. IronFX Australia currently hedges each transaction with its parent and has a general policy of using all client money for the purposes of funding those positions. ASIC believes investors need to be able to make informed decisions and be aware of their broker’s counterparties, and sufficient information should be included in the product disclosure statements.
On their part, investors should ensure they understand their contractual rights and obligations and carefully assess all relevant risks. In this case, they should understand the credit risk posed by the hedging arrangement with IronFX Global before entering into any transactions with IronFX Global Australia.
IronFX Global is a market maker, regulated by the Cyprus Securities and Exchange Commission (CySEC). It offers trading with over 200 instruments in forex, spot metals, stocks and futures. Earlier this year, the CySEC started an investigation against it for denying withdrawal requests from 150 customer, mainly Chinese traders and IBs. The funds they claimed were in the amount of $1.25 million. In November, the CySEC said it required the broker to pay a settlement in the amount of EUR 335,000.
The IronFX group consists of CySEC-regulated IronFX Global, ASIC-regulated IronFX Global Australia, recently-rebranded 8Safe UK, which is authorized by the UK‘s Financial Conduct Authority (FCA), and IronFX Global Ukraine, which is a member of Ukranian forex self-regulatory organization UCRFIN.
Source: ASIC
