Forex Capital Trading Pty Ltd, the over-the-counter derivatives trading platform, better known as ForexCT, has announced that it will not be signing up new clients following the cancellation of its retail license.
ForexCT’s license was canceled by the Australian Securities and Investments Commission (ASIC). The Aussie regulator canceled the license after finding out through an investigation that the derivatives trading platform violated critical obligations that it was required to fulfill as per the Australian financial services (AFS) license. Failure to follow the obligations means that a trading services provider operates deceptively and misleadingly.
According to the findings from the investigation conducted by ASIC, ForexCT was found to be dealing with clients in an unethical manner. The company also failed to provide adequate training for its representatives. It also failed to make sure that it provided its services in a fair, honest, and efficient manner. ForexCT previously issued a notice on its website as the investigations were ongoing.
“From May 28, 2020, ForexCT is no longer accepting new customers. If you are an existing customer on ForexCT, we have sent you an email that sets out the limited basis on which ForexCT will continue to operate.
How will the license cancellation affect already existing customers?
Although ForexCT’s AFS license has been canceled, the exchange will be allowed a grace period through which it will continue operating, and it will expire on July 31, 2020. This grace period will facilitate a grace period through which the company will be allowed to seek ASIC dispute resolution. The grace period will also provide enough time for existing customers to exit their positions and withdraw their funds from the trading platform.
It is currently not clear if the company will pursue measures aimed at making sure that it will be allowed to operate or shut down completely. However, the platform has the option of an appeal through the Administrative Appeals Tribunal responsible for reviewing decisions made by the ASIC. The company has not revealed whether it will pursue this option, although it is a likely path moving forward.