ASIC has banned Mark Bringans, the former responsible manager of over-the-counter derivatives provider Sirius Financial Markets Pty Ltd (Sirius Financial), for eight years.
Mr Bringans' banning follows an ASIC investigation into Sirius Financial (trading as 'Trade360'), which found that Sirius Financial acted unconscionably and breached its Australian financial services licence obligations when it failed to address the conduct of Toyga Media Ltd (Toyga), an off-shore call centre it hired to source clients to trade in its high-risk contracts-for-difference and margin foreign exchange contracts.
ASIC's investigation found that Toyga engaged in pressure selling tactics and provided personal advice on behalf of Sirius Financial when it was unlicensed to do so.
In banning Mr Bringans, ASIC found that he is not adequately trained and competent, that he is not a fit and proper person to provide financial services, and that he ignored one of his key duties as a responsible manager, which was to ensure that Sirius Financial complied with the financial services laws.
ASIC also determined that Mr Bringans was a disinterested, disengaged responsible manager who did little more than attend monthly compliance committee meetings.
Mr Bringans' banning is recorded on ASIC's Banned and Disqualified Persons Register.
Mr Bringans has applied to the Administrative Appeals Tribunal (AAT) for a review of ASIC's decision. His application for a stay of the implementation of the banning order was refused by the AAT.
Background
Following ASIC's investigation, Sirius Financial agreed to wind down its retail and wholesale operations and surrender its license. It ceased providing financial services on 29 July 2022.
ASIC has previously banned two former Sirius Financial executives, Mr Jonathan Schneider and Mr Oskar Pecyna, from controlling an entity that carries on a financial services business or performing any executive or management role in relation to a financial services business for eight years (20-181MR). Both Mr Schneider and Mr Pecyna have applied to the Administrative Appeals Tribunal for a review of ASIC's respective decision.
ASIC has taken previous action against OTC derivates providers, which has resulted in penalties handed down by the Federal Court. AGM Markets was ordered to pay a $75 million penalty (20-246MR) and Forex CT ordered to pay a $20 million penalty (21-120MR) for various breaches of the Corporations Act, including unconscionable conduct.
Responsible managers must have direct responsibility for significant day-to-day decisions about an AFS licensee's financial services. More information is available in ASIC's Regulatory Guide 105 AFS licensing: Organisational competence.
Product Intervention Order
On 5 April 2022, ASIC extended its product intervention order imposing conditions on the issue and distribution of CFDs for a further five years to 23 May 2027. The product intervention has strengthened protections by reducing CFD leverage available to retail clients and by targeting product features and sales practices that amplify retail clients' CFD losses.
The product intervention order came into effect on 29 March 2021 after ASIC reviews in 2017, 2019 and 2020 found that most retail clients lose money trading CFDs. The order imposes restrictions on CFDs issued to retail clients, including:
- leverage ratio limits ranging from 30:1 to 2:1
- standardisation of margin-close out rules
- negative balance protection
- prohibitions on offering or giving of certain inducements.
