Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used trading account #XXXXX for trading operations on the Binary Options market.

The incident on the client’s trading account occurred on March 14th, 2018. At the time of the incident, between 00:10:03 and 00:13:21 (server time) the client opened several positions on the currency pair GBPCHF (12 positions at 4,000 rubles in size and 1 position at 5,100 rubles in size). Further, according to the client, the trading platform experienced a technical issue, during which the price charts for GBPCHF stopped moving on the trading platform, after which a message appeared “trading in GBPCHF has been stopped due to technical reasons”. As a result, all 13 open positions were closed by the broker and resulted in a material loss. It is the client’s opinion that the prices displayed for GBPCHF on the trading platform at the time of the incident were “off-market” rates that significantly differ from the prices available at other trade execution venues.

Considering the above, the client has asked the Dispute Resolution Committee (DRC) of the Financial Commission to check the validity of the trade executions on the client’s account and is demanding a compensation from their broker in the amount of 84,960 rubles (account balance of 53,100 rubles + unrealized profit in the amount of 31,860 rubles), which were lost as a result of the executed trades on the broker’s platform. The client provided documentary evidence to the DRC in the form of written communications with the broker, screenshots of their trading platform during the technical malfunction, historical rates for GBPCHF pair taken from the trading platform of finam.ru, as well as screenshots of GBPCHF price charts taken from the website investing.com.

For its part, the Broker decided that it would be a fair decision in this particular case to cancel all the trades conducted by the client on the trading platform on March 14th, 2018. As such, all trade results were annulled by the Broker.

In studying the facts of the case the DRC determined this to be a “trade-related dispute”. Trade disputes are related directly to the process of trading on the markets and include the execution of orders, margin requirement calculations, commission and trade cost calculations, trade liquidations and other situations directly related to placing trades on the Forex, CFD, and Binary Options markets.  

As such, the Committee conducted a thorough review of the client’s trades, the execution prices and the prices available at other independent execution venues. As a result, the DRC found that the broker unnecessarily annulled the results of all trades and determined which specific trades were executed under normal market conditions.

It is with this determination that the DRC ruled partially in the customer’s favor – to restore the P/L from transactions that executed in normal market conditions.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
14/03/2018 22/03/2018
Complaint response:

The decision for this complaint is based on the information provided by the Client and the Broker.

To ensure an objective investigation of the incident, the Dispute Resolution Committee (DRC) of the Financial Commission closely examined the documentary evidence provided by the parties to the dispute. Having analyzed the materials of the complaint, the Dispute Resolution Committee has come to the following conclusions:

The disputed transactions on GBPCHF were analyzed by the DRC to ensure that trades were executed at real market prices. To conduct this unbiased analysis the DRC received historical price data from several independent execution venues. The analysis of the tick price data showed:

  1. Transactions ## 413830671, 413830688 should not be challenged, since they were executed and closed at reasonable, live market rates.
  2. Transactions ## 413830720, 413830756 should not be challenged, since they were executed at reasonable, live market rates and even though they were closed at rates that signaled a technical error was about to occur, since the closing price did not affect the material outcome of the trade.
  3. All further transactions and trading results (## 413831298, 413831304, 413831316, 413831322, 413831354, 413831367, 413831374, 413831458, 413831710, 413831718, 413832271, 413832294, 413832319) should be annulled because they were opened and closed at “off-market” rates according to the DRC’s analysis.

Taking into account the above-mentioned trade execution analysis, the DRC is of the opinion that the Broker should reinstate the trading results (P/L) for transactions ## 413830671, 413830688, 413830720, 413830756 and compensate the client 9,600 rubles, which equals the amount of profit/loss resulting from these transactions.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 9,600 rubles
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

April 6th 2018