The Australian Securities and Investments Commission (ASIC) has cancelled the operational license of the now-defunct Prospero Markets, which offered contracts for differences (CFDs) instruments to retail traders.
Prospero Markets Lost AFS License
The cancellation of the Australian Financial Services (AFS) license, effective from 25 September, came after the regulator suspended it in December 2023. The broker is currently under liquidation after a federal court, upon the application of ASIC, ordered the wind-up of its business on “just and equitable grounds.”
“Under the Corporations Act, ASIC may suspend or cancel an AFS license if the licensee is being wound up or if the licensee has ceased to carry on a financial services business,” the regulator noted.
However, the brokerage can still appeal ASIC’s decision.
Last month, ASIC also cancelled FXOpen’s AFS license, citing serious concerns about the “inadequacy of its human resources to provide financial services and to carry out supervisory arrangements.”
Links to a Massive Money Laundering Chain
Prospero Markets obtained the AFS license in late 2012, authorizing it to offer over-the-counter derivatives and foreign exchange contracts to retail and wholesale clients.
However, ASIC’s action against the broker came after an investigation that began last year when Australian police charged former officers and responsible managers of the brokerage with money laundering in October 2023. These charges were linked to the Changjiang Currency Exchange money remitting chain, which was accused of laundering nearly $229 million over three years.
In its investigation into the brokerage business, ASIC found a “broad range of concerns regarding the management of Prospero’s business.” The regulator highlighted potential breaches of the broker’s licensing conditions and its obligations as an issuer of over-the-counter derivatives.
While suspending its license last December, the Australian regulator cited the broker’s failure to submit annual financial statements and audit reports on time.
“ASIC has specified that until 25 March 2026, Prospero Markets must continue to be a member of AFCA, continue to have arrangements for compensating retail clients, including the holding of professional indemnity insurance cover, and must comply with the ASIC Client Money Reporting Rules 2017,” the latest announcement added.
The Australian Securities and Investments Commission (ASIC) has cancelled the operational license of the now-defunct Prospero Markets, which offered contracts for differences (CFDs) instruments to retail traders.
Prospero Markets Lost AFS License
The cancellation of the Australian Financial Services (AFS) license, effective from 25 September, came after the regulator suspended it in December 2023. The broker is currently under liquidation after a federal court, upon the application of ASIC, ordered the wind-up of its business on “just and equitable grounds.”
“Under the Corporations Act, ASIC may suspend or cancel an AFS license if the licensee is being wound up or if the licensee has ceased to carry on a financial services business,” the regulator noted.
However, the brokerage can still appeal ASIC’s decision.
Last month, ASIC also cancelled FXOpen’s AFS license, citing serious concerns about the “inadequacy of its human resources to provide financial services and to carry out supervisory arrangements.”
Links to a Massive Money Laundering Chain
Prospero Markets obtained the AFS license in late 2012, authorizing it to offer over-the-counter derivatives and foreign exchange contracts to retail and wholesale clients.
However, ASIC’s action against the broker came after an investigation that began last year when Australian police charged former officers and responsible managers of the brokerage with money laundering in October 2023. These charges were linked to the Changjiang Currency Exchange money remitting chain, which was accused of laundering nearly $229 million over three years.
In its investigation into the brokerage business, ASIC found a “broad range of concerns regarding the management of Prospero’s business.” The regulator highlighted potential breaches of the broker’s licensing conditions and its obligations as an issuer of over-the-counter derivatives.
While suspending its license last December, the Australian regulator cited the broker’s failure to submit annual financial statements and audit reports on time.
“ASIC has specified that until 25 March 2026, Prospero Markets must continue to be a member of AFCA, continue to have arrangements for compensating retail clients, including the holding of professional indemnity insurance cover, and must comply with the ASIC Client Money Reporting Rules 2017,” the latest announcement added.
This post is originally published on FINANCEMAGNATES.
