The Financial Markets Authority (FMA) has suspended the derivatives issuer licence of EncoreFX (NZ) Limited after the business was put into voluntary administration by its Canadian parent.
While the licence is suspended, EncoreFX will still be permitted to close out any open positions it has with existing retail clients. The administrators have been providing the FMA with regular updates regarding the administration.
To provide derivatives products to retail investors, a business must have a derivatives issuer licence from the FMA. The licence suspension can be lifted if the administrators find a new owner for EncoreFX that is able to satisfy the FMA that EncoreFX can meet the requirements for licenced derivative issuers.
The FMA understands that EncoreFX's customer base is largely wholesale.
Rees Logan, Adam Nikitins and Stewart McCallum of EY were appointed as administrators on 30 March 2020.
The FMA issued EncoreFX a derivative issuer licence in August 2016, and the suspension took effect at 5pm on Friday 24 April 2020.
