Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:
The Client used account # 72790 for active trading in the Forex market. According to the Client, on Mar 13, 2019, he funded his trading account with 2000 EUR and started trading. After making a profit in the series of trades taken in the period from Mar 13, 2019, to Mar 14, 2019, the Client found his account blocked by the Broker for violating their T&C.
The Client claims that the Broker accused him of trading at non-market prices by utilizing price discrepancies between the quotes published by the Broker and other providers of financial services. The Client considers the actions of the Broker as incompetent and unfair. In connection with the above, the Client requests the Dispute Resolution Committee to check the disputed transactions and requires from the Broker to return the funds in the amount of 7626.57 EUR (initial deposit 2000 EUR + profit 5626.57 EUR). The Client provided the screenshots of his trading account as documentary evidence.
In turn, the Broker does not see any grounds for the Client’s complaint and refers to clause 19 of the Service Agreement:
- OUTSIDE EXECUTION SYSTEM
Non authorized Automatic or semi-automatic trading mechanism integrated by the client on the browser or client side, that does not involve human execution, will be considered back door API or system abuse that may result to an account suspension and/or position cancellation.
In support of its decision, the Broker provided the history of all transactions performed by the Client, the server log records, as well as the supporting file that shows it has access to “proper pricing” from LPs, on which it is basing its arbitraging reasoning on.
|Financial Commission Complaint
|Complaint Raising Date
|Complaint Filing Date
The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.
After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:
According to the results of voting in the framework of this case there was an equal distribution of votes between the members of the DRC (both in favor of the Broker and in favor of the Client). Thus, due to the lack of opportunity to make a unanimous decision on this case, as well as taking into account the facts listed above, the members of the DRC have decided:
a) The Company must bear the proper but limited responsibility for the occurrence of technical problems in its trading system and belated reaction in their elimination;
b) The Company must be duly responsible for the untimely notification of the Client about the revealed violations of its trading rules;
с) The Company should formulate more clearly the provisions of regulatory documents concerning price latency arbitrage. As an example, the following wording could be recommended:
You consent that the Company reserves the right to immediately terminate your access to the trading platform(s) or Account(s) or refuse or cancel any order, in the event you voluntarily and/or involuntarily partake in arbitrage unrelated to market inefficiencies, including but not limited to, latency arbitrage and swap arbitrage and/or contrary to good faith; under such circumstances, the Company may at its discretion, close any of your Account(s) and recover any losses incurred from such practices.
Based on the above, the DRC of the Financial Commission has decided that reasonable compensation should be paid to the Client. Also, according to the general opinion of the DRC members, the Broker should provide necessary measures for timely detection of such technical problems and their elimination in the future.
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
|If you have any questions regarding this investigation, please send them to the following address [email protected]
|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.
Head of DRC