Australia’s financial regulator canceled XTrade.AU Pty Ltd’s license due to significant compliance failures in its CFDs offerings.
Today, ASIC confirmed the license cancellation of XTrade.AU Pty Ltd, effective immediately. On April 29, 2024, the company requested a review from the Administrative Appeals Tribunal (AAT). However, the AAT denied a stay order, so the cancellation will remain until the final judgment. XTrade offered OTC derivatives, including leveraged CFDs and FX contracts, to retail clients in Australia.
Between June 2018 and September 2022, XTrade neglected its duties as an AFS license holder. ASIC highlighted XTrade’s “unconscionable conduct” during this period. The broker did not ensure its representatives followed financial service laws and failed to manage conflicts of interest. Moreover, XTrade’s retail product distribution must align with its target market.
The investigation revealed XTrade’s selfish practices over four years. The broker put its interests above clients’ and acted in bad faith. Representatives at XTrade engaged in continuous misconduct without adequate training.
ASIC has imposed strict regulations on CFD brokers servicing retail clients. The regulator reduced the maximum leverage to 30:1. ASIC issued temporary stop orders for DDO violations against TMGM, Saxo, and Mitrade and sued eToro for similar breaches, marking a first in broker actions.
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