Retail OTC Derivative Issuer XTrade's AFS License Revoked

The Australian Securities and Investments Commission (ASIC) has revoked the Australian Financial Services (AFS) license of XTrade.AU Pty Ltd (XTrade), a retail over-the-counter (OTC) derivatives issuer. 

XTrade offered clients opportunities to trade in Contracts for Difference (CFDs) and foreign exchange contracts (FX contracts). XTrade has held AFS license 343628 since 12 April 2010.

ASIC canceled XTrade's AFS license after an investigation found that several vulnerable clients were encouraged to trade in CFDs without affordability or with limited trading experience, resulting in significant losses for some consumers.

ASIC’s investigation found that between June 2018 and September 2022, XTrade failed to comply with its general obligations as an AFS licensee and:

• engaged in unconscionable conduct;
• did not take reasonable steps to ensure that its representatives complied with financial services laws;
• did not have adequate arrangements for the management of conflicts of interest;
• failed to take reasonable steps to ensure its retail product distribution was consistent with its target market determination;
• did not do all things necessary to ensure that financial services were provided efficiently, honestly and fairly.

ASIC also found that XTrade put its own interests above those of its clients and did not act in good faith, falling short of the standards expected of an AFS licensee. Further, XTrade failed to prevent its representatives from engaging in misconduct over many years and failed to ensure that they underwent adequate training.