Foreign exchange firm Excelsior Markets appeals FMA deregistration

Tuesday 29th September 2015

Excelsior Markets, an Auckland-based online foreign exchange trading company, is appealing a decision by the Financial Markets Authority to deregister it one day after the successful appeal of another firm, Vivier & Co.

Excelsior was one of 23 firms the markets watchdog removed from the Financial Services Provider Register in May after reviewing referrals from the registrar.

The FMA has powers to direct the registrar to remove companies where it is likely they are giving a false or misleading impression about the extent to which they are regulated in New Zealand. It’s concerned some offshore companies may be trying to take advantage of New Zealand’s reputation as a well-regulated jurisdiction.

Excelsior Markets, which is based at the offices of tax agent Equity Trust International in Auckland’s Newmarket, launched an appeal today in the High Court at Auckland against the FMA decision.

That follows yesterday’s decision by Justice Timothy Brewer that the FMA had breached Vivier & Co's rights to natural justice when it failed to supply the financial services firm detailed evidence regarding the decision to strip its registration as a financial services firm. Vivier, which counts one-time political operator Luigi Wegwege as a director, was removed from the register because the FMA didn’t believe the company was providing services in New Zealand.

Vivier successfully appealed its deregistration in court, arguing the FMA only began to investigate the firm after a member of the public passed on an interest.co.nz online news article, linking the firm to sub-prime mortgages in Ireland, and questioned whether that reflected badly on the reputation of New Zealand’s financial regulation.

In the notice of deregistration, the FMA didn’t mention the article, which Justice Timothy Brewer found was a breach of natural justice and didn’t give Vivier the ability to directly confront allegations that it was engaged in money laundering in Ireland.

The article by Gareth Vaughan, published on Feb. 26, 2015, detailed Vivier's dispute with an Irish television channel over claims sub-prime mortgages were funded by the proceeds of British fraud.

Excelsior Markets’ appeal is the second since the FMA was granted the powers under the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014. During last month's hearing on Vivier & Co, FMA counsel Mary Scholtens QC told the court 100 companies had been deregistered since the legislation, with four appeals filed to court, including two that were waiting on the outcome of the Vivier appeal before proceeding.

Companies Office records show Excelsior Markets has a sole director Steven Green and is owned by Excelsior International, which is based in the United Arab Emirates. It was set up in New Zealand in 2013 to allow clients to place foreign exchange trading orders on its offshore-based platform MetaTrader5. Apparently it doesn’t yet have any New Zealand clients.

Its website said the business had a simple strategy from inception: “a steadfast adherence to being the best possible partner to clients who want a partner”.

BusinessDesk.co.nz

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