- ASIC cancels XTrade license for exploiting vulnerable clients and regulatory violations.
- XTrade appeal to reinstate its license is denied and cancellation remains effective pending final AAT decision.
The Australian Securities and Investments Commission (ASIC) has revoked the Australian Financial Services (AFS) license of XTrade.AU Pty Ltd, a prominent CFD and FX contracts broker, due to unethical practices and regulatory violations.
This decisive action follows an ASIC investigation revealing XTrade systemic exploitation of vulnerable clients, who were encouraged to trade CFDs despite inadequate financial resources and limited trading experience, leading to significant losses.
From June 2018 to September 2022, ASIC found that XTrade failed to comply with its AFS license obligations. The company engaged in unconscionable conduct, neglected to ensure its representatives adhered to financial laws, poorly managed conflicts of interest, and misaligned its product distribution with target market determinations.
XTrade appeal to the Administrative Appeals Tribunal (AAT) for a review and stay of the license cancellation was denied, meaning the license remains revoked pending the AAT’s final decision.
