An Australian financial services firm has been stripped of its licence in derivatives after a regulator found it hadn’t met a number of licence obligations.

An Australian financial services firm has been stripped of its licence in derivatives after a regulator found it hadn’t met a number of licence obligations.

The Australian Securities and Investments Commission cancelled the Australian financial services licence of Global Derivative Services Pty Ltd, it said in a statement yesterday.

“According to its website, GDS holds itself out as a leader in the field of forex, binary options and contracts for difference. The company's only director, Brenton Ganesh Nair, lives in South Africa,” ASIC said.

GDS did not comply with the following: the appointment and ongoing competency of the key person on the AFS licence; notification of changes to the responsible person; lodgement of accounts; payment of debts; adequacy of financial and human resources, by failing to maintain an Australian resident director and registered office, and failing to provide up-to-date details with the Financial Ombudsman Service and on its website.

“Licensees must ensure they are up-to-date and actively complying with all current obligations. ASIC will not hesitate to act against licensees who fail in this regard,” Greg Tanzer, commissioner at ASIC, said.

The regulator said that over the past two years it has seen a rise in the number of entities applying for an AFS licence authorising the entity to operate a retail OTC derivative business, particularly in the area of retail margin foreign exchange services.

“ASIC is continuing to conduct a surveillance of this industry and currently has several investigations into retail OTC derivative businesses on foot,” it added.

GDS has the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.