January 14th, 2021, The Financial Commission today announces the results of its operations for the previous year with the publication of the 2020 Complaints Summary. The organization achieved record annual growth in key metrics, as well as significant membership expansion during a challenging year impacted by the Covid-19 pandemic while maintaining a quick and efficient average dispute resolution time.

New records set in 2020

Other key metrics & accomplishments in 2020

Annual Complaints Summary

Key Takeaways

Conclusions

The Financial Commission mitigated disruptions caused by the global Covid-19 pandemic to continue providing quick and efficient dispute resolution services to traders and broker members in 2020. Market volatility events during the last year, including those in oil, gold, and equities markets provided for a hefty amount of new complaints for the organization and led to new records in operational metrics. 

The organization further expanded in the Middle East, with several new Turkish broker members, as well as the addition of a Turkish expert on the Dispute Resolution Committee. The organization’s free dispute resolution service to traders gained popularity in Asia, the Middle East, and Africa with new complaints from these regions growing 202%, 15%, and 14% respectively in 2020. The Financial Commission also saw a 17% decrease in complaints from Russia and former Soviet republics, as local market restrictions impeded the normal online trading operations FX and CFD traders have come to expect. 

The majority of complaints in 2020 were related to financial issues with 55% of the total, while trading related disputes accounted for 25%. The most popular topics for complaints dealt with funds withdrawal (31%), agreement breach (17%), price check (14%), and account blocking (6%). Of all resolved complaints, 52% were resolved “in favor of the broker” and 18% resolved “in favor of the client”, while 30% were found to be outside the organization’s jurisdiction. 

Heading into 2021, the Financial Commission sees continued global challenges from the Covid-19 pandemic, as well as political instability in the US as having a substantial impact on market prices and volatility in the near term and expects to continue to see elevated numbers of new complaints submitted by traders in 1Q 2021.  

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges, and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD, and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

January 12th, 2021, The Financial Commission announces continued growth in submitted and resolved complaints, as well as compensation awarded to traders for December 2020 as part of its monthly Complaints Digest. The organization recorded a significant increase in resolved complaints, percentage of awarded compensation, and several other key metrics while achieving an average dispute resolution time of just 6.1 days.

Key monthly highlights for December 2020:

Month Over Month Comparison

Key Takeaways

Conclusions

Global impacts from Covid-19 continued to impact market volatility as investors looked to have embraced equity and shares Contracts for Difference (CFD) trading more so than traditional Forex. Continued interest in trading has supported the demand for dispute resolution services, as highlighted by several key metrics of the Financial Commission, including new complaints filed and total complaints resolved, average complaints values, and non-member compensation sought. While financial-related complaints continued to dominate, non-trading complaints jumped 39%, suggesting investors are having issues outside of traditional trading and funding or withdrawals. At the same time, the Dispute Resolution Committee (DRC) was able to rule a significantly higher number of complaints in favor of traders in December, as cases ruled in favor of clients jumped 100% month-over-month.

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges, and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD, and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

December 15th,  2020, The Financial Commission announces a steady rise in values of submitted complaints, as well as compensation sought from traders for the month of November 2020 as part of its monthly Complaints Digest. The organization recorded a slight decrease in newly filed complaints for the month while experiencing growth in compensation sought, average complaints values, and several other key metrics while achieving an average dispute resolution time of just 6.8 days.

Key monthly highlights for November 2020:

Month Over Month Comparison

Key Takeaways

Conclusions

The US Elections have come and gone with a renewed focus in the financial markets on Covid-19 vaccinations and additional stimulus measures. Traders have returned to global markets in healthy numbers and the increased trader activity in global markets, including equities and Contracts for Difference (DRC) has supported the demand for dispute resolution services, as highlighted by the improvements in several key metrics, including total amounts sought, average complaints values and non-member compensation sought. While financial-related complaints continued to dominate, trading related complaints accounted for 22%, suggesting investors are back to finding trading opportunities following recent market uncertainties. At the same time, the Dispute Resolution Committee (DRC) was able to rule a significantly higher number of complaints in favor of brokers in November, as a large number of complex disputes remained unresolved at the end of the November statistical period.  

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges, and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD, and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

November 16th,  2020, The Financial Commission announces a significant rise in its operating metrics for the month of October 2020 as part of its monthly Complaints Digest. The organization recorded a significant uptick in newly filed complaints for the month while experiencing growth in compensation awarded to traders, the compensation sought, and several other key metrics while achieving an average dispute resolution time of just 7.8 days.

Key monthly highlights for October 2020:

Month Over Month Comparison

Key Takeaways

Conclusions

As slow summer months have come and gone with Covid-19 global impacts and US elections continuing to influence market prices, the Financial Commission experienced a resurgence of complaints and requests for compensation in disputes from traders. The increased trader activity in global markets, including equities and Contracts for Difference (CFD) had increased the demand for dispute resolution services, as highlighted by the improvements in several key metrics, including new complaints filed, amounts sought and amounts awarded. While financial-related complaints continued to dominate, trading related complaints experienced a 20% rise month over month, suggesting investors are back to finding trading opportunities following a summer lull. At the same time, the Dispute Resolution Committee (DRC) was able to rule a significantly higher number of complaints in favor of clients in October, as the month over month total jumped 90% to 42 complaints from 22 in September.  

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges, and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD, and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

October 7th,  2020, The Financial Commission announces its operating metrics for the month of September 2020 as part of its monthly Complaints Digest. The organization recorded a slight decrease in newly filed complaints for the month while experiencing growth in several key metrics and achieving 132% in the amount of compensation awarded to traders as part of its dispute resolution service.

Key monthly highlights for September 2020:

Month Over Month Comparison

Key Takeaways

Conclusions

The end of summer has brought with it a resurgence of Covid-19 related disruptions around the globe along with subdued volatility in global markets, leading to fewer opportunities for traders. Echoing these short-term changes the Financial Commission experienced a slowdown in several key metrics, including average complaints value, amounts sought by traders, and total new complaints. Financial-related complaints continued to dominate, indicating that traders are continuing to deal with issues related to funds withdrawal, rather than trading, as witnessed in previous months. At the same time, the Dispute Resolution Committee (DRC) awarded significantly more compensation to traders in September than previous months, while increasing average dispute resolution times in order to provide sound and reasonable resolutions to traders.  

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges, and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD, and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

August 5th,  2020, The Financial Commission announces its operating metrics for the month of July 2020 as part of its monthly Complaints Digest. The organization experienced a slowdown in new complaints as traders headed into the summer months and market volatility slowed. The organization achieved another month of growth in some key metrics as well as a slowdown in others, while its key metric of dispute resolution times improved significantly month over month.

Key monthly highlights for July 2020:

Month Over Month Comparison

Key Takeaways

Conclusions

The Financial Commission continues to effectively resolve traders’ disputes and public inquiries in a difficult environment as the Covid-19 pandemic continues to impact the globe. Established traders look to be winding down trading positions heading into the summer months, while new traders continue to be interested in trading Forex and CFD, as indicated by the number of new complaints received and processed. The Dispute Resolution Committee witnessed a rise in trading related complaints, which increased by 6% in July as compared to June. Meanwhile, a slowing influx of new complaints amid continued operational efficiencies was attributed to a record average resolution time, which improved 25% to a record 5.14 days from 6.9 days overall for all complaints resolved in July 2020.

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

July 15th,  2020, The Financial Commission today announces its operating metrics for the first half of 2020 as part of its ongoing Complaints Digest publications highlighting the organization’s performance. Heightened interest in trading volatile global financial markets by traders of all experience levels during the Covid-19 pandemic has led to improvements in most key metrics of the dispute resolution service of the organization. The resulting increased public inquiries and disputes throughout the first half of 2020 were resolved in significantly short timeframes. 

Key Half Year Highlights (as compared to 2H 2019):

A Detailed Summary

Key Takeaways for 1H 2020

Conclusions

The Financial Commission continues to effectively resolve traders’ disputes and public inquiries despite global disruptions and elevated trader and broker activity around the world. Continued trading opportunities in global markets, as well as interest in trading Forex and CFDs have resulted in an continued growth of key operating metrics for the organization. The Dispute Resolution Committee witnessed a rise in trading related complaints, which increased by over 52% in the first half of 2020 as compared to 2H 2019 and confirms the trader activity witnessed by brokers. Meanwhile, increased dispute topics complexity and sheer volume of complaints led to a slight delay in average resolution times, which still remain quick when compared to major regulatory bodies around the world.

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD and digital asset markets.

The Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

February 10th, 2020: The Financial Commission today announces the results of its operations for the previous year with the publication of the 2019 Annual Summary. With record-setting key metrics and continued improvements to operations, the organization continues to find efficiencies during a time of increased trader inquiries and disputes, regional expansion and diversification of its services.

Setting Records

Among the notable accomplishments for 2019:

The Financial Commission experienced record growth during 2019 while improving efficiencies in its core metrics, including significantly growing the amount of complaints filed, resolved and compensation awarded from a total of $7.4 million sought by traders. Complaint statistics reveal an increase in the amount of complaints resolved for traders and brokers, as well as compensation for certain categories of disputes.

Perhaps the most important statistic – average dispute resolution time – has also improved over the last year and is now 7 days, having decreased by 14% from the previous period. The speedy processing and resolution of disputes during a period of record numbers of complaints is a result of continued efficiencies and improvements made to operations during 2019.

New Members & Services

During 2019 the Commission expanded its membership ranks with 8 new members, as well as 5 trading technology certifications, including Collective investment technology certification for PAMM and copy trading service providers. The Dispute Resolution Committee (DRC), tasked with independently evaluating and judging customer complaints in an unbiased manner was also expanded with three new experts from Europe, Australia and Israel.

 

 

Continuing its commitment to traders and the industry as a whole, the Commission launched FX media and a unique broker directory called “Check Your Broker” in order to help traders quickly check the status of their broker and find out all the important regulatory and business developments impacting the FX & CFD industry worldwide.

 

 

 

About Financial Commission

Founded in 2013, the Financial Commission is a leading independent member-driven external dispute resolution (EDR) organization for international online brokerages, exchanges and Blockchain firms that participate in global foreign exchange (forex), derivatives, CFD and digital asset markets.

Financial Commission provides efficient compliance solutions to its members, alongside its External Dispute Resolution (EDR) mechanism that serves as an effective channel for processing complaints from clients of member firms.

For more information please contact us at [email protected].

New Members and Services, Continued Growth and Efficiencies, Additional Business Segment and Appointments

February 6th, 2019: The Financial Commission today announces the results of its 2018 annual report. From the creation of a new business segment for digital asset firms to the expansion of its existing member services for FX and CFD brokers, the Financial Commission proves its ability to diversify and the vital role it continues to play supporting international market participants.

Accordingly, Financial Commissions continues to be one of the fastest-growing and most recognized independent SRO and EDR body in the global retail Forex industry.

Financial Commission’s 2018 annual report shows sustained growth in many of its key business drivers, surpassing some previously achieved records. While the amount of total compensations awarded to broker member clients in 2018 moderated to $784,380, down from $1,564,700 YoY, the number of total new complaints rose to a record 945. Likewise, the number of resolved complaints increased 23% YoY to 816, up from 629.

Financial Commission services – including assisting with disputes – continue to see significant demand and interest from the broader trading community. The amount of complaints registered against non-member brokers totaled 129, with a majority (82) related to funds withdrawal issues. Furthermore, the amount of trading-related complaints for the non-member segment increased 3x as compared to 2017.

As the number of filed and processed complaints increased by 20% and 23% respectively for the calendar year, the timeframe of resolving the average complaint increased by nearly 20% to 7.9 days, as compared to 6.59 days in 2017. The Dispute Resolution Committee (DRC) of the organization attributes this rise to the increased number of processed complaints and the complexity of submitted cases that require additional time for expert input to ensure a balanced and transparent resolution.

The Dispute Resolution Committee continued to see increased geographical diversity among broker clients who submitted complaints or otherwise inquired with questions to the organization. Specifically, a significant amount of complaints were received from Asia, Latin America and The Middle East, as compared to prior years. Likewise, only 21% of all complaints were submitted in English, highlighting the Financial Commission’s multi-language capabilities of handling disputes.

The Commission remained steadfast in improving its core business in 2018 with the launch of additional “Value added” services for broker members. Provided at little or no cost depending on the needs of the member, the services include a virtual dealer platform, multi-asset liquidity, a community-driven registry of client watchlists and an order execution quality certification from partner Verify My Trade.

The Verify My Trade order execution quality certification is similar to the “best execution” requirements in major international jurisdictions, providing an added layer of transparency for brokers and their customers by highlighting the quality of trade executions. In 2018, nine broker members were certified by VMT.

Further to Financial Commission’s core business, the organization launched new a self-regulatory effort in response to cryptocurrency market developments, with the establishment of a Blockchain Association, and guided by a newly formed Blockchain Expert Committee (BEC). Membership in the Blockchain Association will extend the free dispute resolution service already available to a new segment digital asset (cryptocurrency) traders and Blockchain firms. The Association and BEC aim to solve common issues and questions arising from physical exchange of digital currencies by customers, storage of digital assets on the Blockchain, and regional regulations and compliance in key global markets where digital currencies are in high demand. In 2018, the Association added 4 approved member firms and appointed 11 experts to the BEC.

Financial Commission also took proactive steps to improve trader education and regulatory insights for its broker members. In September 2018 the Expert Opinion column was launched on the organization’s official website providing free articles from industry experts, including members of the DRC and BEC.

The organization’s cross-border synergies with national regulatory bodies continued in 2018, including participation in several meetings with the Association of Forex Dealers (AFD) and Russia’s State Duma Committee on Financial Markets by Financial Commission Chairman, Peter Tatarnikov, where Mr. Tatarnikov consulted committee members on variety of areas, including the regulation of CFDs, improvements to the current Forex legislation and KYC requirements for broker clients, advising on forex and derivatives trading.

In step with its strategy of expanding into digital assets and Asian markets, Financial Commission attended numerous events and participated as an exhibitor, and on a panel at key industry gatherings in 2018 across the globe, including in Europe, Asia, Israel and the US providing ample interaction with the public including gauging hearing industry sentiment.

Financial Commission 2018 Results in Review

On the backdrop of significant regulatory changes in key Forex market geographies including ESMA-related changes in Europe, as well as volatile trading conditions, Financial Commission was strategically aligned with the needs of the industry in 2018, as evidenced by its results and record achievements. Furthermore, with the expansion into digital assets and Blockchain, the organization also expanded its reach to cryptocurrency traders, investors and tech firms.

Even in mature and electronic markets, it is natural for disputes to arise from time to time, yet the process for resolving disputes between counterparties, including broker-to-client trading, is not always straightforward. Financial Commission’s mission is to assist the industry in overcoming these inevitable challenges, by providing fair and efficient dispute resolution as a core service.

When grievances cannot be amicably resolved between member brokers and their customers, a formal complaint is filed with Financial Commission – where it is then examined using a systematic approach and is fully investigated before being reviewed by the DRC to render a non-bias decision. Using a proven dispute resolution process, Financial Commission achieved another exceptional year across some of its key operating metrics during 2018, including the following highlights:

2018 Highlights

2018 Statistics in Review

Below the Commission presents further details of its Annual Report for 2018, with statistics on the number of complaints handled and key metrics regarding processing and mediation results. The statistics information is insightful to our members and their clients, the public, and for brokerages and technology developers that are considering the benefits of obtaining membership with the Financial Commission and/or are interested in learning about the organization’s structure.

As market participants continue to demand best execution and fair dealing, the need for transparency continues to grow and brokers that are willing to voluntarily demonstrate transparency by becoming members.

Building trust is crucial and using fair and neutral 3rd party dispute resolution – that Financial Commission provides – is an effective solution in cases where clients or brokers cannot resolve matters together and seek an independent channel and wish to avoid often complex legal or costly arbitration alternatives. The Financial Commission continues to achieve this objective by providing brokerages and technology firms with the benefits that accompany membership status, as seen in the statistics results for 2018.

As the number of new member continued to grow, there was a significant increase in the total number of complaints received in 2018 (945 complaints filed), compared Year-over-Year from 2017 (764 complaints filed). This nearly 20% increase was driven from the addition of new members reflecting the increasing credibility and positive reputation Financial Commission has been earning since its foundation, and coupled with market volatility from major geopolitical events during the year.

The monetary amounts for complaints filed during 2018 ranged from as low as $100 to as much as $76,800, and the total amount of compensation that was paid out was $784,380 from a total of 945 complaints filed. The six-figure total compensation sought highlights the increased monetary significance of the complaints processed by the DRC and broker client’s reliance on the Commission in getting disputes resolved (as opposed to, in some cases, resorting to other regulatory bodies and legal channels including costly arbitration).

The geographical reach of the Commission, as well as language options for traders continue to diversity the pool of traders who submit complaints for review. Thus, while the Russia & CIS region continues to be the prominent geographic origin of trader disputes, Asia, the Middle East and Latin American now account for 11%, 9% and 8% of all disputes files in 2018, respectively. Likewise, 4%, 5% and 6% of complaints were processed in Asian, Latin and Arabic languages, respectfully.

Overview of 2018 Complaints Statistics:

o   Complaints filed against Members 816 (86%)

o   Complaints filed against non-Members 129 (14%)

o   A record 945 Complainants sought $3,184,932

o   Maximum complaint amount awarded $260,240.00*

o   Minimum complaint amount awarded $10.00

o   Resolutions in favor of client 153 (19%)

o   Resolutions in favor of broker 373 (46%)

o   Out of jurisdiction 290 (36%)

*Includes account trading bonuses

Types of Complaints

Trading complaints are directly related to the process of trading on the market and the affect of execution of orders, payment of margins, calculation of commissions, forced liquidation of positions and other parts of the trade cycle. These complaints are considered by the Dispute Resolution Committee and included in the statistics.

o   against Members 228

o   against non-Members 3

Financial complaints are related to transactions on the account, and in majority of cases involve delays in withdrawals. Such complaints do not fall under dispute resolution process; however, the Financial Commission never rejects such complaints and helps advocate the payment process with clients till the end. We do not record cases of non-payment of funds to the clients by Member-companies. Nevertheless, in cases when such complaints are received against non-member companies providing of a refund to the client from the broker is often very problematic.

o   against Members 283

o   against Non-Members 82

Non-trading complaints are often clients’ complaints about the facts of losses incurred as a result of cooperation with the administering traders and sales consultants. To a lesser extent these are complaints for automatic copying transactions systems and signaling services. Such complaints do not fall under the dispute resolution process; however, we always analyze the contract, risks warning, correspondence and negotiations with the client and also give our assessment of the situation and recommendations for a possible settlement of the dispute.

o   against Members 305

o   against Non-Members 44

Geographies and Languages

Disputes processed by language:

English 21%
Russian 64%
Asian (Thai, Indonesian, Chinese, etc.) 4%
Latin (Spanish, Portuguese) 5%
Arabic 6%

 

Disputes processed by region:

Russia & CIS 62%
Asia 11%
Middle East 9%
Latin America 8%
Europe 7%
Africa 4%
North America 1%

 

Blockchain Association and Blockchain Expert Committee

Financial Commission first engaged with blockchain technology providers in 2015 and recognized the importance of developing best-practices for crypto exchanges which share many parallels to foreign exchange markets and technology used by forex brokers. This is partly because existing laws do not recognize digital assets yet or regulations have not yet been created in many parts of the world.  Even in places where guidelines and guidance exist from regulators, consumer protection mechanisms are still evolving.

Given these circumstances, the Financial Commission developed effective solutions for digital asset traders and investors to increase self-regulatory efforts in the absence of government-sponsored mechanisms. The Blockchain Association relies on the Blockchain Expert Committee (BEC) which is comprised of Blockchain industry experts, including those that have participated in independent 3rd party dispute resolutions in the past, and have studied the facts of each dispute and the processes in place to reach an official resolution. Because the dispute resolution process is not currently based on established market regulations, the resolutions provided are non-binding on the customer and their service provider yet provide significant value in the form of recommendations for both parties.

The BEC is led by Steven Hatzakis, the Global Director of Research, Forex & Crypto for ForexBrokers.com, a Reink Media Group brand. Steven is an active fin-tech and crypto industry researcher and advises blockchain companies at the board level.

Blockchain Association Members

In 2018 the Blockchain Association added 4 approved members.

Blockchain Expert Committee

In 2018, the Financial Commission appointed 11 experts to the BEC. To find out more about the business profiles of each expert, please visit our website.

Steven Hatzakis – Global Director of Research, Forex & Crypto for ForexBrokers.com

Simon Grunfeld – Founder & Executive Director – Ibinex

Dmitri Turkevich – Director of Business Development at Rambler&Co.

Aleksey Kutsenko – CEO Tools4Brokers.com

Bryan Feinberg – CEO and Founder of Etheralabs, Zephyr and P2Primex

Pavel Salas – CEO Tokenbox

Stanislav Shamayev – Crypto and Blockchain Business and Corporate Attorney

Vasily Alexeev – СТО Serenity, CEO UpTrader

Clark Hogan – Founder Byzantine Works

Rika Khurdayan – Dilendorf Khurdayan PLC

Max Dilendorf – Dilendorf Khurdayan PLC

Katerina Troshina – Co-Founder SmartDec

2018 Events, Meetings, Developments, and Cross-border Collaborations

Continuing into commitment to the APAC region, Financial Commission exhibited at the 2018 iFX Expo in Hong Kong which took place at the end of January, followed by the 2018 Asia Trading Summit in Shanghai in March, followed by the 2018 iFX Expo in Cyprus in May, as well as participated in the 2018 IFINEXPO in Beijing. In November 2018 the organization also exhibited at the Finance Magnates London Summit.

 

Echoing its strategy of expansion into digital assets and Blockchain in 2018, the Financial Commission participated in the 2018 Trading Show New York, Blockchain Shift 2018 in Miami and the Next Block Blockchain Conference in Tel Avil in December.

 

 

Continued interaction with government regulators included consultations by Financial Commission Chairman, Peter Tatarnikov at important meetings of the Expert Council of the Association of Forex Dealers (AFD) at the Committee on Financial Markets of the State Duma, as well as the III International Conference on the Protection of Investors Rights in Moscow. Mr. Tatarnikov assisted the AFD in a variety of areas, including the regulation of CFDs, improvements to the current Forex legislation and KYC requirements for broker clients.

Public feedback continued to be supportive of the role that Financial Commission holds in the industry and these views were supported by the increased number of new members and other key areas of growth experienced during the year.

New Member Announcements in 2018

 

Appointments Made to the DRC in 2018

A total of three persons were appointed to Financial Commission’s DRC in 2018, bringing the total current number of committee members to twenty one.

Demetrios Zamboglou – Chief Business Developer Officer in Lykke AG

Demetrios is a multi-award winning executive and academic financial market specialist, holding a Fellow Charter Membership from the Chartered Institute of Securities and Investments (CISI) and he is the recipient of the European Commission (2017), Microsoft Research Grant (2016), the Amazon Web Services Award (2014) and the 30 under 30 prize by Square Mile Magazine in 2011. Dr Zamboglou obtained his MEng in Computer Systems Engineering with concentration in Formula Engines from Lancaster University, and his MSc from CASS Business School, where he specialised in IPOs and financial markets. Dr Zamboglou holds a PhD from King’s College London in Behavioural Finance. Demetrios Zamboglou is the Chief Business Developer Officer of Lykke AG, a financial technology company, responsible for the Firm’s International Business. Dr. Zamboglou joined the Firm in November 2016 from FXTM, where he led the firm’s UK operations. Prior to that, he held progressively senior roles as a corporate executive, risk manager, and quantitative analyst. Before Lykke, Dr. Zamboglou held Executive leadership roles at FXTM, zebrafx and FOREX CLUB specialising in issues including business development, strategy, risk management, market-making, and compliance.

Roland Gemayel – Chief Dealer in Lykke

Roland Gemayel holds numerous degrees, including a PhD in Finance from Kings College in London, as well as a Master of Science with distinction from Cass Business School. Prior to joining Lykke, Roland was the Chief Dealer at Maximus FX and is also the founder of eSocialTrader – a financial resource on the topic of social trading, where Roland publishes opinions, experience, and research findings on the growing phenomenon of social trading. His work is published in top academic finance journals. Roland is a senior finance professional with over seven years of international experience in risk management, market making, financial modeling, consulting, product development, business operations, and strategy. His current work at Lykke as the chief dealer involves developing market making algorithms and building performance metrics and risk systems to ensure steady growth of trading operations.

Pavel Khizhnyak – Founder of Tradefora

With Bachelor degree in Oriental science, MBA in Project Management, vast experience in Asian markets, and being fluent in Mandarin Chinese, Pavel is a frequent guest speaker at regional industry events and roundtables.  In 2013 Pavel founded Trade Exact Consulting, which provides market entry and business development services for brokers expanding into Asian markets. In 2015 Pavel became a Founding Partner of Tradefora PLC – OTC industry’s first fully automated TCA and trade execution analytics engine for retail FX, CFD, and margin crypto traders.

Current Members of the Dispute Resolution Committee (DRC)

  1. Anatoly Bulanov – Head of Dispute Resolution Committee
  2. Simon Grunfeld  – Founder, Gallant Partners
  3. Ilan Azbel – CEO, AutoChartist
  4. Lior Nabat – CEO, Tradency
  5. Aleksey Kutsenko – CEO, Tools4Brokers
  6. Juan Pablo Jutgla – CEO, Better Way FX Consulting
  7. Akin Abbak – Managing Partner, Abbak Attorneys at Law
  8. Kristina Nettles – Vice President, Integral
  9. Nir Porat – Co-Managing Partner,  Ben Basat, Porat & Co.
  10. Peg Reed – COO, Forex Development Corporation
  11. Dr. Anna Becker – Founder, Sherpa
  12. Ran Cohen – Founder, Traders Education
  13. Carl Elsammak – CEO, Kammas Trading
  14. Maor Lahav – COO and co-Founder, Panda Trading Systems
  15. Quinn Perrot – GM, TRAction Fintech
  16. Brian Phillips – Founding Partner Argosy Global Advisors
  17. Alexey Sidorov – Chairman, Financial Market Development Association of Belarus (ARFIN)
  18. Valery Dolgov – CEO IndigoSoft
  19. Demetrios Zamboglou – Chief Business Developer Officer in Lykke AG
  20. Roland Gemayel – Chief Dealer in Lykke
  21. Pavel Khizhnyak – Founder of Tradefora

Technology & Education Certifications

The Financial Commission certified the trading technology of FDCtech, Inc. (formerly Forex Development Corporation) and Binomo, as well as the trader education provider Trader’s Education. This brings the total number of certified providers to 12.

 

 

Closing Remarks from Financial Commission Chairman

“We are pleased with Financial Commission’s many achievements in 2018, and are continuing to take steps at improving and expanding our services into 2019. On the backdrop of highly dynamic conditions last year for financial markets and the financial services industry, Financial Commission experienced significant growth in some of our core operating metrics, including a record number of complaints received and processed for the second year in a row. Notwithstanding the addition of new FX broker members and certified firms, we have achieved so much in improving and expanding our core business, as well as launching a completely new venture for digital asset traders. Our Blockchain Association quickly gained traction and attention from industry participants, helping us onboard 4 member firms within just the first month of operation and assemble a group of experts to assist us going forward. We thank all of our members and supporters dedicated to helping foster transparency with their commitment to our rules and use of Financial Commission’s services, as we now enter our 7th year of operation. We continue to welcome new members and encourage new and existing brokerages, technology developers, digital asset exchange and Blockchain firms, whether regulated, unregulated, or self-regulated, to submit their membership application to Financial Commission, and review our requirements to see if your firm will qualify for approval. Members that become approved show their customer their willingness to be open and transparent and, Financial Commission will stand by both sides in cases where a complaint is filed through our EDR system, and with the aim to bring it to resolution fairly and swiftly. We look forward to continuing to improve our core services for FX traders and continue building out our digital asset and Blockchain-focused segment. Likewise, we hope to continue to provide valuable education and resources to help them determine the best way forward in their trading.”

Peter Tatarnikov,

Chairman,

Financial Commission

March 6th , 2018: FinaCom PLC, operator of the Financial Commission (FinancialCommission.org) – an independent Self-Regulatory Organization (SRO) and External Dispute Resolution (EDR) body for foreign exchange (Forex), CFD, and cryptocurrency market participants, including retail consumers, brokerages, and technology providers, today announces the results of its 2017 annual report.

Financial Commission’s 2017 annual report reveals substantial increases in many of its key business drivers, with significant acceleration compared to its 2016 results. The amount of compensations awarded increased exponentially to $1,564,700.00 in 2017, a nearly tenfold rise compared Year-over-Year (YoY) from $157,326 in 2016.

From the creation of new business segments to the expansion of its management and staff, and new approved members and improved complaints processing statistics for 2017, Financial Commission continues to prove its ability to scale and the vital role it has supporting international market participants. Accordingly, Financial Commissions is one of the fastest-growing and most recognized independent SRO and EDR body in the global retail Forex industry.

Financial Commission experienced greater interest from the broader trading community in assisting with disputes, as the number of complaints registered against non-member brokers rose to 135 in 2017, up more than triple on the year-over-year basis compared to 37 filed in 2016. A record 764 complaints sought over $5.77m in complaints.

Even as the number of filed complaints increased by nearly 500% rising to 764 for the calendar year (or more than 63 per month on average) Financial Commission demonstrated that its EDR system is highly efficient as the speed of resolving the average complaint improved by 7% compared to 2016. Likewise, the ratio of resolved complaints improved by 15% in 2017, reflecting the increased efficiency of Financial Commission’s dispute resolution process.

Further to Financial Commission’s core growth as an independent for-profit business, there were significant cross-border synergies with national regulatory bodies including ARFIN in Belarus during 2017, and Russia’s State DUMA shortly after the conclusion of the calendar year where Chairman Peter Tatarnikov consulted the Financial Markets Committee, advising on forex and derivatives trading.

 

Financial Commission attended numerous events and participated as an exhibitor, and on panels at several key industry gatherings in 2017 across the globe, including in Europe and Asia, providing ample interaction with the public including gauging sentiment and hearing feedback..

Major Industry Themes During 2017

Financial Commission 2017 Results in Review

On the backdrop of highly dynamic market conditions and a new cryptocurrency-related landscape steadily emerging, Financial Commission was strategically aligned with the needs of the industry in 2017, as evidenced by its results and record achievements.

In terms of the relationship between counterparties, including broker-to-client trading, as it is natural for disputes to arise from time to time, the process for resolving such disputes is not always as straightforward, and providing fair and efficient dispute resolution is a core part of Financial Commission’s mission to assist the industry in overcoming these inevitable challenges.

When grievances cannot be amicably resolved between member brokers and their customers, a formal complaint is filed with Financial Commission – where it is then examined using a systematic approach and is fully investigated before being reviewed by the DRC to render a non-bias decision. Using a proven dispute resolution process, Financial Commission achieved another record year across many of its key operating metrics during 2017, including the following highlights:

2017 Highlights

About Financial Commission 

Founded in 2013, Financial Commission (operated by FinaCom PLC) is a for-profit independent business that operates as an EDR and SRO and is not a governmental organization nor designated by any sovereign nation. Financial Commission provides services-based & membership-based solutions and maintains brands domiciled in several jurisdictions including Hong Kong (HK), the United Kingdom (UK) and Saint Vincent and the Grenadines (SVG). The three pillars that uphold Financial Commission’s mission statement are market transparency, efficient dispute resolution, and market participant education.

Supporting self-regulatory efforts is just one of the benefits provided by the Financial Commission as its members join voluntarily – yet members must adhere to strict guidelines to maintain membership and demonstrate transparency, compliance, and integrity.

Financial Commission facilitates an unparalleled dispute resolution process between online brokerages and their end-customers when the inevitable case of trade disputes cannot be resolved between parties.

The subject of each complaint can be as diverse as the underlying broker, product, or customer, yet all disputes share one thing in common which is to seek fair dealings regardless of the financial services products, providers, trading technologies, or pricing issues related to market participants’ transactions, from the complaints that are filed.

Financial Commission helps protect the interests of both brokers and traders in a non-bias manner by providing a fair and neutral platform to effectively resolve complaints. Financial Commission ensures that traders and brokers are getting their disputes resolved in an efficient, unbiased, and quick manner, using a proven EDR platform. While dispute resolution services are only available to members, Financial Commission provides a growing array of non-member services such as technology certification solutions and an expanding partner network. Financial Commission’s official website is https://FinancialCommission.org, and is steered by its executive board, management team, and committee members, with leadership that spans the global industry.

Executive Board

Peter Tatarnikov – Chairman

 

Peter has 17 years’ experience in the Forex Industry. He started his career as a trading desk assistant back in 1999 and in 2003 he filled a Chief Dealer position in one of the largest retail Forex brokers in Russia. In-depth knowledge of FX operations and high managerial skills brought Peter to a COO position at Forex Club USA in 2006 and in 2010 he earned a CEO chair. During his career, Peter designed and held over 200 seminars on Forex Trading. He also conducted seminars for senior representatives of the Bank of Russia on western models of Forex regulation.  Professional trader and author of a dozen books Dr. Alexander Elder, included Peter’s trading strategy into his book “Entries & Exits”. Peter’s professionalism and commitment have made him a well-known FX market commentator and spokesperson for the retail FX industry.

Michael Greenberg – Board Member

Michael Greenberg is the CEO and founder of Forex Magnates. Michael launched Forex Magnates in 2009 as a simple blog in an effort to bring more transparency to the forex market. Ever since the humble project grew into a well known portal providing daily news, commentary and research about the forex industry in 7 languages. Since 2012 Forex Magnates is also operating several major industry B2B conferences such as Tokyo and London Summit and IFXEXPO Asia. Prior to Forex Magnates Michael worked as Sales Executive for a forex software firm and prior to that was an Associate in an investment bank. In January 2012 Michael was chosen as “Forex Person of the Year 2011” by the prestigious FXStreet portal.

Alexey Pavlenko – Board Member

Alex has 17 years of marketing experience and he is a true expert in strategic planning and operational marketing. His career includes a variety of projects including the Forex industry. One of Alex’s strengths are start-ups and has helped develop 3 major Forex projects from scratch.  In 2003 he was appointed to the Chief Marketing Officer position at one of the largest retail FX Brokerage companies – Forex Club, where he successfully led growth and market innovation initiatives.

Management Team

Anatoly Bulanov – Head of Dispute Resolution Committee 

Anatoly has rich experience in the field of trading and finance in general, as well as over a decade experience in financial markets education. Online and offline seminars, trading rooms, and market research are just a few of the elements Anatoly has specialized in, having witnessed and dealt with countless situations and scenarios that any trader could ever stumble upon. The International Academy of Exchange Trade in Beijing and Forex Club in New York are some of the places where Anatoly has built up his impressive track-record. Founder of educational portal GMTPartner.org, Anatoly provides traders and investors with proprietary market sentiment indicators based on the portfolio of trading strategies.

Nikolai Isayev – Chief Operating Officer

Nikolai held a number of senior roles for GAIN Capital Group’s Forex.com brand, with a concentration across various regions including Russia, Eastern Europe, Australia and the US. While at GAIN Capital Group, Nikolai held senior marketing roles which included managing and coordinating across related efforts tied to trading signal products and platform technology localization in many regions of the world including five years in Russia and the Commonwealth Independent States (CIS) for the broker. Nikolai is the founder and president of New York-based Dartek Consulting, a boutique advisory firm providing marketing and consulting services to venture capital firms, crypto companies and online brokerages.

Artem Karpichenko – Senior Operations Officer

Artem Karpichenko is a law professional who currently holds the role of Senior Operation Officer, helping our organization serve participants in the online financial brokerage industry. Before his current role, Artem was a Senior Counsel at RDI Group in Moscow, where he gained hands-on experience dealing with court litigation and legal cases that often arose between consumers and companies. Artem obtained a Bachelors of Laws from King’s College London, after obtaining a Master’s degree in Civil Law from the Russian Academy of Justice in Moscow, where he is currently pursuing a Ph.D. in the field of legal work in Government agencies.

2017 Statistics in Review

Below the Commission presents further details of its Annual Report for 2017, with statistics on the number of complaints handled and key metrics regarding processing and mediation results. The statistics information is insightful to our members and their clients, the public, and for brokerages and technology developers that are considering the benefits of obtaining membership with the Financial Commission and/or are interested in learning about the organization’s structure.

As market participants continue to demand the best execution and fair dealing, the need for transparency continues to grow and brokers that are willing to voluntarily demonstrate transparency by becoming members.

In March, Financial Commission expelled a member for non-compliance after it did not honor the ruling of the DRC related to monetary awards based on two complaints filed against it from two affected customers. This expulsion also required that Financial Commission take emergency action to help the affected clients by utilizing the compensation fund to pay the customers a combined $7,082 to cover that two award amounts and cover the damages after their broker failed to do so.

Building trust is crucial and using fair and neutral 3rd party dispute resolution – that Financial Commission provides – is an effective solution in cases where clients or brokers cannot resolve matters together and seek an independent channel and wish to avoid often complex legal or costly arbitration alternatives. The Financial Commission continues to achieve this objective by providing brokerages and technology firms with the benefits that accompany membership status, as seen in the statistics results for 2017.

As the number of new members added grew, there was a significant increase in the total number of complaints received in 2017 (764 complaints filed), compared Year-over-Year from 2016 (165 complaints filed). This nearly 500% increase was driven from the addition of new members reflecting the increasing credibility and positive reputation Financial Commission has been earning since its foundation and coupled with market volatility from major geopolitical events during the year.

The monetary amounts for complaints filed during 2017 ranged from as low as $7 to as much as $846,200.00, and the total amount of compensation that was paid out was $1,564,700.00 from a total of 764 complaints filed. The nearly five-fold increase in compensation sought highlights the increased monetary significance of the complaints processed by the DRC and broker client’s reliance on the Commission in getting disputes resolved (as opposed to, in some cases, resorting to other regulatory bodies and legal channels including costly arbitration).

Overview of 2017 Complaints Statistics:

 

 

Types of Complaints

Trading complaints are directly related to the process of trading on the market and the effect of execution of orders, payment of margins, calculation of commissions, forced liquidation of positions and other parts of the trade cycle. These complaints are considered by the Dispute Resolution Committee and included in the statistics.

Financial complaints are related to transactions on the account, and in the majority of cases involve delays in withdrawals. Such complaints do not fall under dispute resolution process; however, the Financial Commission never rejects such complaints and helps advocate the payment process with clients until the end. We do not record cases of non-payment of funds to the clients by Member-companies. Nevertheless, in cases when such complaints are received against non-member companies providing a refund to the client from the broker is often very problematic.

Non-trading complaints are often clients’ complaints about the facts of losses incurred as a result of cooperation with the administering traders and sales consultants. To a lesser extent, these are complaints for automatic copying transactions systems and signaling services. Such complaints do not fall under the dispute resolution process; however, we always analyze the contract, risks warning, correspondence and negotiations with the client and also give our assessment of the situation and recommendations for a possible settlement of the dispute.

2017 Events, Meetings, Developments, and Cross-border Collaborations

Financial Commission exhibited at the 2017 iFX Expo in Hong Kong which took place at the end of January, followed by the 2017 Asia Trading Summit in Shanghai in March, followed by the 2017 iFX Expo in Cyprus in May where Chairman Peter Tatarnikov spoke on a panel about regulation and gave an interview to a local TV channel at the expo. In November 2017, Financial Commission also attended the 2017 Finance Magnates London Summit.

Event participation in 2017 continued to provide Financial Commission with direct access to meet with brokers and technology providers as well as interact with professional and retail traders.

2017 IFX EXO Cyprus

2017 IFX EXO Cyprus

2017 IFX EXO Hong Kong

 

2017 Asia trading Summit Shanghai

2017 Asia trading Summit Shanghai

2017 IFX EXO Hong Kong

2017 Finance Magnates London Summit

 

Public feedback continued to be supportive of the role that Financial Commission holds in the industry and these views were supported by the increased number of new members and other key areas of growth experienced during the year.

In early November Financial Commission enhanced its member rules with regard to complaints processing and subsequently added QR codes to its Certificates to deter the risks of clone websites and forged information.

Following the MoU announced in 2016 between Financial Commission and the Association of Financial Market Development (ARFIN) in Belarus, in July 2017 Financial Commission welcomed ARFIN’s chairman to join Financial Commission’s DRC.

At the end of November 2017, Chairman Peter Tatarnikov joined the Expert Council of the Association of Forex Dealers (AFD) in Russia.

 

New Member Announcements in 2017

Category A

 

 

Category B

 

 

Upgraded category of Membership to A level

 

 

Approved Fintech Providers

 

Appointments Made to the DRC in 2017 

A total of seven new persons were appointed to Financial Commission’s DRC in 2017, bringing the total current number of committee members to nineteen.

Dr. Anna Becker – Founder Sherpa

With more than 20 years of senior leadership and innovation in retail brokerage and finance organizations, Dr. Anna Becker has core experiences in founding retail software solutions and building retail brokerages. She has proven expertise in bringing new technologies like big data systems, behavioral systems and automation to drive innovation in retail trading. Dr. Becker’s early entrepreneurial successes range from founding Strategy Runner (Sold) to driving growth in established organizations (MF Global, Gilboa Fund). Lately, she founded Sherpa (www.allsherpa.com) to provide new technologies and services to retail financial institutions. As an experienced executive and change agent in retail finance, Dr. Becker has worked with more than 300 brokers and has served as the compliance officer with regulators like the NFA and CFTC. Dr. Anna Becker holds MSc degree in computer science and PhD degree in AI from Technion (Israel). She is also an author of several books on Artificial Intelligence and has deep experience in algorithmic investment solutions.

Ran Cohen – Founder Traders Education and FX Leads

Ran Cohen, Founder and CEO of Traders Education, a pioneer in online financial education, continues to support traders around the world with a wide range of educational resources available in 30 languages and helping brokerages to improve their most important business metrics. In addition to Traders Education, Mr. Cohen founded Fx leads – one of the most successful lead generation agencies for forex brokers. Mr. Cohen has more than 14 years of advisory experience in the financial retail industry which helps power both companies. He has served a vast number of clients with leading performance based education & marketing tools for brokers, affiliates, and IB’s from all over the world.

Maor Lahav – COO and co-founder of Panda Trading Systems

Maor Lahav is a seasoned financial technology executive with more than 10 years of experience. Maor started his career as a young algorithm trader in the 90s, and one of his primary expertise is the large scale high performance systems arena, infrastructure built out, web applications and engineering for high frequency & low latency trading environments. As the Chief Operating Officer, Maor in charge of the relationships with Panda’s strategic partners Panda Trading Systems (Panda TS) specializes in building high-performance, cutting-edge technology for the online financial trading industry. Since 2006 they have provided many of the world’s leading online brokerages with a range of products and services specifically customized to meet their business needs. The company’s vision is to continually provide brokers with solutions that streamline operations so they can focus their resources on growth. Panda TS is best known for their unique approach to building strong partnerships with their client.

Quinn Perrot – GM, TRAction Fintech

With an extensive background in IT, Quinn started in the financial markets as IT Manager for City Index. He then went on to be co-founder and General Manager of AxiTrader, one of Australia’s largest Margin FX providers. Quinn’s knowledge of OTC derivatives and trading platforms has made him an important figure in the derivatives regulatory and industry reform space. Quinn has provided educational sessions to Australia’s regulatory bodies in relation to retail derivatives trading platforms. Quinn has also dealt with Treasury in Canberra, Australia to advise on and discuss the retail OTC derivatives industry. At the moment Quinn holds a position of General Manager in TRAction Fintech

Brian Phillips – Founding Partner, Argosy Global Advisors

Brian began his career at Goldman Sachs within the Fixed Income, Currencies and Commodities (FICC) Division. He was instrumental in expanding the business into new markets and helped build out the liquidity, API, algo and platform offerings for hedge funds, banks, asset managers and retail broker clients. After extensive work within the institutional space at Goldman Sachs, Brian founded Argosy Global Advisors.

Alexey Sidorov – Chairman of the Financial Market Development Association of Belarus (ARFIN)

Alexey Sidorov – Chairman of the Financial Market Development Association of Belarus (ARFIN) is a prominent financial markets economist with senior-level executive experience which includes serving for private companies and governmental financial institutions over a career spanning 17 years. In his most recent position, Alexey was Deputy Head of the Department for Foreign Economic Activities Monitoring at National Bank which drafted legal regulatory acts under the main directorate for currency regulation and currency control. Alexey held this role from 2013 through June 2016, and his work involved monitoring foreign trade activities and drafting appropriate regulations to meet policy needs as Deputy Head of the department. Before his promotion to the role of Deputy Head, Alexey was Chief Economist at National Bank, for eight years from 2005 through 2013, and during that time was an adviser (councillor) for the currency regulation department within the main administration of currency regulation and currency control. This department drafted legal acts and maintained existing rules for currency regulations and under Alexey’s guidance. From 2001 to 2005 before joining National Bank, Alexey was senior economist at Infobank (JSCB) within the active operations department which managed the bank’s loan portfolio and sale of banking products.

Valery Dolgov – CEO IndigoSoft

Valery has created his own IT-company, IndigoSoft LTD, which has united a team of highly skilled specialists in the field of broker software development. The accumulation of extensive practical experience and skills has allowed him to create a new unique product – Broker Pilot. This is a corporate web-platform, which takes the technological level of dealing to an unprecedentedly high level of quality. This platform has realtime monitoring, risk management and automatic management of broker business processes. Valery’s goal is to create new technologies and provide them to management companies and brokers. Valery has finished a postgraduate degree in the Saratov state Technical University, specializing in IT. Since 2003 he has created trading algorithms, platforms, liquidity API for hedge funds, managing companies and brokers. He has many years of successful trading experience in financial markets and great experience as a Chief Dealer. Valery has earned a reputation as one of the best professionals in the industry.

Current Members of the Dispute Resolution Committee (DRC)

  1. Anatoly Bulanov – Head of Dispute Resolution Committee
  2. Ilan Azbel – CEO, AutoChartist
  3. Carl Elsammak – CEO, Kammas Trading
  4. Simon Grunfeld  – Founder, Gallant Partners
  5. Lior Nabat – CEO, Tradency
  6. Aleksey Kutsenko – CEO, Tools4Brokers
  7. Juan Pablo Jutgla – CEO, Better Way FX Consulting
  8. Akin Abbak – Managing Partner, Abbak Attorneys at Law
  9. Kristina Nettles – Vice President, Integral
  10. Nir Porat – Co-Managing Partner, Ben Basat, Porat & Co.
  11. Peg Reed– COO, Forex Development Corporation
  12. Vadim Sviderski–Editor, Finance Magnates
  13. Anna Becker – Founder, Sherpa
  14. Ran Cohen – Founder, Traders Education and FX Leads
  15. Maor Lahav – COO and co-Founder, Panda Trading Systems
  16. Quinn Perrot – GM, TRAction Fintech
  17. Brian Phillips – Founding Partner Argosy Global Advisors
  18. Valery Dolgov – CEO IndigoSoft
  19. Alexey Sidorov – Chairman, Financial Market Development Association of Belarus (ARFIN)

Technology Certification Services Extended to Education Providers and ICO Issuers

In August 2017, Financial Commission extended its technology certification service to financial technology (Fintech) companies pursuing the use of blockchain technology via an Initial Coin Offering (ICO) and that are seeking to voluntarily demonstrate compliance with a minimum set of standards established by Financial Commission’s ICO Certification Committee. Initially, several experts were appointed as committee members, following the creation of the ICC division in 2017.

Pavel Salas – Head of the ICO Certification Committee

Pavel is well known in the foreign exchange industry for his senior roles in international FX brands, including Alpari, Alfa-Bank, and GKFX. More notably, Mr. Salas developed and managed the Russian and CIS operations of one of the world’s most popular social trading platforms, eToro. Today, Pavel has emerged as an expert in the field of cryptocurrency and blockchain technology. He is currently the CEO of Tokenbox, a unique ecosystem that combines crypto-currency funds under the management of professional portfolio managers and traders on the one hand and investors on the other. Pavel is also the founder of Blockchain Consult advisory, focused on educating companies on the technology and the integration of blockchain in traditional business processes. Apart from his business practices, Mr. Sales has conducted master classes related to cryptocurrencies and blockchain in leading universities in Russia, as well as advising the State Duma of Russian Federation on the regulation of these new markets and technologies.

Steven Hatzakis – Fintech Consultant

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba-%d1%8d%d0%ba%d1%80%d0%b0%d0%bd%d0%b0-2017-08-28-%d0%b2-20-30-40 Steven Hatzakis is the CEO of his Fintech consulting firm Steven Hatzakis Inc., and serves as Global Director of Research, Forex & Crypto, for Michigan-based Reink Media Group, heading the ForexBrokers.com and FuturesBrokers.com portfolio brands. Steven holds a series 3 license as a commodity futures representative and registered CTA for over a decade. He has spoken at and attended over 30 industry events including as a member of the media, in New York, Switzerland, London, Cyprus, and Hong Kong. Steven previously served as an Editor for Finance Magnates and has held numerous positions with technology-driven online multi-asset brokerages regulated in the US and internationally over the course of nearly 20 years in the Forex industry.

Avi Mizrahi – Blockchain Editor at Finance Magnates

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba-%d1%8d%d0%ba%d1%80%d0%b0%d0%bd%d0%b0-2017-08-28-%d0%b2-20-34-37 Avi is a trained economist with a BA and MBA from TAU, specializing in finance and entrepreneurship. His interest in the business culture in greater China led to his studying for an IMBA at the National Chengchi University in Taipei. He previously worked at a stock options trading desk for a bank in Israel and later as an associate for FXCM. Avi is Finance Magnates’ Blockchain Editor and has been covering the cryptocurrency ecosystem since 2013.

Dmitri Turkevich – Director of Business Development at Rambler&Co.

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Dmitri Turkevich is a seasoned marketing professional in the online advertising industry with a focus on digital marketing within the online finance and gaming sectors. Since November 2015, Dmitri currently serves as Director of Business Development at Rambler&Co. an innovative marketing agency that serves content on the web and mobile devices to 42 million users across multiple publications and through its various brands. Since 2013, Dmitri is currently a partner at MediaSniper, a Moscow-based media company that provides global Real-Time Bidding (RTB) and Demand Side Platform (DSP). Prior to founding MediaSniper in 2013, Dmitri was CEO of Direct Media & Gaming and with the firm for over six years since March of 2008. Before embarking on his nearly-decade career in finance marketing, Dmitri studied economics in 2002 for four years at the Institute for US and Canadian Studies – a Russian think tank that is part of the Russian Academy of Sciences.

Simon Grunfeld – Founder & Executive Director – Ibinex

simon Simon’s roots stem from the retail FX marketplace and IT solutions – a former registered CTA with the NFA, Simon has a solid background of the inner workings of the capital markets. Simon started his career in IT and then became a registered CTA (2006) to form Gallant FX and then co-founded and headed up the product development of Gallant VPS and co-founding Gallant Capital Markets (GCMFX). His expert knowledge of developing a project and launching products, in some markets, driven by innovation, has allowed him to participate in the launch of some brokerages and the deployment of SaaS/PaaS initiatives, in use by many large retail institutions. Simon founded Ibinex in 2014 and now caters to a growing number of White Labels and institutional cryptocurrency solution providers.

Bryan Feinberg – CEO and Founder of Etheralabs, Zephyr and P2Primex

Bryan Feinberg is the CEO and Founder of Etheralabs, Zephyr and P2Primex. All early stage innovation launchpads. For the past past several years has been deeply involved across the Blockchain ecosystem and across multiple early stage and emerging companies technologies and ecosystems.. Bryan is a licensed investment banker holding is 7, 63 and 79 FINRA Licenses as well as a Founding Partner of The-Blockchain.com. Focus Areas: Banking & Regulatory Compliance, Syndication, Intelligence, Wallet Security, Search, Machine Learning and Big Data.

Theodosis Mourouzis – Director of the MSc in Business Intelligence and Data Analytics at the Cyprus International Institute of Management (CIIM)

Theodosis is a Research Fellow at UCL’s Centre for Blockchain Technologies (UCL-CBT) amd Director of the MSc in Business Intelligence and Data Analytics at the Cyprus International Institute of Management (CIIM). Theodosis is also an advisor to BitJob, Greeneum and Crypto20 and have been a consultant with PeerPlays. He holds a BA/MA and a Master of Advanced Study in Mathematics from University of Cambridge, a Master of Research (MRes) in Security Science and a PhD in Information Security and Cryptography from University College London (UCL). His interests lie in the areas of cryptanalysis, applications of data analytics techniques in fraud prevention and Blockchain security and regulation. He has consultancy experience across many different countries and he has been a consultant with many SMEs and big organisations such as banks and technology bodies. He is Recipient of the UK University Cipher Champion 2013 award.

Vitaly Bulychev – Co-Founder – Pandora Boxchain

Vitaly Bulychev is known as an entrepreneur, investor and researcher in the field of distributed ledger technology since 2012. Inspired by the opportunities of decentralization and synergy of cross-disciplinary competencies, Vitaly invested in a number of crypto-related projects, including industrial-scale mining and private investor pool management. At the moment, Vitaly is working on Pandora Boxchain, a project on the global decentralized economy of artificial intelligence, and also consults and participates in the implementation of a number of projects, in particular, the processing platform, delegated democracy tools and solutions in the field of cybersecurity.

Embracing the emerging blockchain economy driven by innovation, Financial Commission announced the acceptance of cryptocurrency as a method of payment for its services and to align with industry trends.

In response to a need to distinguish educational materials from marketing content, in November 2017 Financial Commission extended its Technology Certification service to education providers, with the launch of the Education Provider Certification service. This new offering enables educational providers to voluntarily subject their educational materials for review by Financial Commission, when seeking to become a certified Education Provider.

2018 Outlook: Cryptocurrency Increasingly Adopted by Multi-Asset Forex Brokers

Following the reduction in leverage in 2017 that was anticipated in Financial Commission 2016 report, regulators have shifted to begin to issue guidance and restrictions about margin-based cryptocurrency CFDs, cryptocurrency exchanges trading the underlying, and announcements related to ICOs.

We expect these trends to continue to impact the online brokerage industry as fintech companies seek to raise capital via ICOs while implementing blockchain into their products and services, as well as see more brokerages continue to launch cryptocurrency CFDs, exchange-traded cryptocurrency products, and trading the underlying. Forex Brokers offering cryptocurrency CFDs faced challenges in 2017 with sourcing crypto liquidity and managing risks during high periods of market volatility causing leverage and trading to be reduced, comparable to the risk-management steps taken during Brexit-related market volatility during extreme times when leverage was reduced and trading suspended or put in close-only mode. We expect the industry to further mature in this regard as more crypto assets become listed as CFDs with more and more forex brokers that offer margin-based trading, as well as delivery of the underlying.

Many self-regulatory trade associations are emerging to help meet the needs of the industry and may play an increasingly important role to guide policy for institutions and law makers, as new regulations are established to support the emerging blockchain economy in different parts of the world. Forex and CFD brokers continue to face the challenge of scaling their volumes amid a reduction in leverage and the demand for best execution. We expect regulatory arbitrage to become more pronounced then dissipate in a cyclical manner as new regulations are established in the wake of further innovations for public decentralized networks and for permissioned blockchain networks, as well as rules surrounding how related cryptographic assets are traded on secondary markets.

As a rise in ICO marketing scams and unbalanced advertising has led to major bans on serving ICO-related ads on networks like FaceBook already in 2018, these trends highlight the growing need for best-practices to be established for marketers involved in ICOs and token sales. Financial Commission’s Technology Certification service expanded to include Education Provider certification and ICO certification, to align with the growing needs of the Financial Technology and the Financial Services industry. We expect these segments to continue to evolve and mature as market conditions dictate.

For brokerages and technology providers operating in less stringent regulatory environments and jurisdictions where either no formal rules have been outlined, becoming a member of an independent SRO such as Financial Commission demonstrates a commitment to compliance, and helps win and maintain clients’ trust.

With industry trends firmly in place, Financial Commission is positioned to sustain its growth through 2018, pending any major overhaul to global financial markets by the G20, for margin-based derivatives including forex, CFDs and cryptocurrencies, as well as trading the underlying in over-the-counter (OTC) and exchange-traded markets. Financial Commission’s work with other private and national bodies, helps align our efforts strategically with emerging trends and needs of the broader community.

Online brokerages and technology providers who put their clients’ interests first, join Financial Commission to provide customers a channel for dispute resolution, in the inevitable rare cases when disputes cannot be resolved internally.

With the arrival of cryptocurrencies, financial product complexity has risen to new heights, and client education has never been more important when it comes to understanding the evolving risks and potential of various investment products, including a broker’s policies and procedures, product specifications, internal processes and controls – and other material information which affect customers and their contractual relationship with their broker.

Financial Commission continues to strive to educate clients, and brokers, and support related initiatives while holding brokers to high standards, and investigating each complaint that is filed through our EDR system by using a proven approach to the dispute resolution process.

Closing Remarks from Financial Commission Chairman

“We are delighted with Financial Commission’s record achievements in 2017, and are continuing to carry that momentum into 2018. On the backdrop of highly dynamic conditions last year for financial markets and the financial services industry, Financial Commission experienced exponential growth in many of our core operating metrics. We experienced new milestones across the board last year including in membership, complaints processing, technology certification, education initiatives, as well as appointments to management, staff and committees, the creation of new business segments, and cross-border synergies with private and government organizations, all supporting our core mission. We thank all of our members and supporters dedicated to helping foster transparency with their commitment to our rules and use of Financial Commission’s services, as we now enter our sixth year of operation. We continue to welcome new members and encourage new and existing brokerages and technology developers, whether regulated, unregulated, or self-regulated, to submit their membership application to Financial Commission, and review our requirements to see if your firm will qualify for approval. We’ve also benefitted from industry feedback as we look to improve amid a changing landscape for financial markets globally with geopolitical tensions, rising interest rates, and the arrival of blockchain and cryptocurrencies. We look forward to continuing to roll out our new range of services to help the new and existing members, including technology certification services to non-members. Members that become approved show their customer their willingness to be open and transparent and, Financial Commission will stand by both sides in cases where a complaint is filed through our EDR system, and with the aim to bring it to resolution fairly and swiftly.”

Peter Tatarnikov,

Chairman,

Financial Commission

To learn more about the benefits and requirements of joining the Financial Commission, available for brokerages and technology providers, contact us and visit www.financialcommission.org

February 15th, 2017: New York & Hong Kong: FinaCom PLC, operator of the Financial Commission (FinancialCommission.org) – an independent self-regulatory organization and external dispute resolution (EDR) body for the online trading industry including FX and CFD market participants, retail financial consumers, brokerages, and technology providers, today announces the results of its 2016 Annual Report.

2016 Membership Growth, New Appointments, Key Events and Industry Observations

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Financial Commission’s 2016 annual report recaps another year of continued growth. As the number of approved membership applications increased during the year, so did the number of complaints that were filed with Financial Commission during 2016.

 

There was further expansion from new appointments to the Dispute Resolution Committee (DRC) and significant cross-border synergies with other regulatory and non-governmental organization (NGOs), as well as meetings with foreign regulators and industry event participation in Europe and Asia where key Industry themes were observed and collected from market participants’ feedback.

 

Key Industry Themes During 2016

Financial Commission 2016 in Review

On the backdrop of challenging market conditions, Financial Commission was well positioned to handle a significant increase in the number of complaints together with the addition of new members, as factors such as trading volumes and volatility ranged from low to high surrounding major events throughout 2016 and which led to considerable changes in asset values for active and passive market participants.  

Whether due to volatile market conditions or from the normal course of day-to-day operations, disputes may arise between customers and their broker from time-to-time. When such grievances cannot be amicably resolved, a formal complaint is filed with Financial Commission – where it is then examined using a systematic approach and is fully investigated before being reviewed by the DRC to render a non-bias decision. Using a proven dispute resolution process, Financial Commission achieved another record year across the board during 2016 including the following key highlights:

2016 Highlights

About Financial Commission

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Financial Commission operates as an independent EDR using a membership-based structure and is not a governmental organization or sanctioned by any jurisdiction, and is domiciled in Hong Kong under FinaCom PLC. The ethos of our mission statement is transparency, swiftness, and education, which are the paramount drivers that uphold our operations.

Supporting self-regulatory efforts is just one of the benefits provided by the Financial Commission to its members who join voluntarily – yet must adhere to strict guidelines in order to maintain membership and demonstrate transparency, compliance, and integrity to their customers.

The Financial Commission helps intermediate fair dealings by providing an unparalleled dispute resolution process between online brokerages and their end-customers, in the rare but inevitable cases of trade disputes that cannot be resolved.

The subject of each complaint can be as diverse as the underlying broker, product, or customer, yet all disputes share one thing in common which is to seek fair dealings regardless of the financial services products, providers, trading technologies, or pricing issues related to market participants’ transactions, from the complaints that are filed.

Financial Commission guarantees protection of the interests of both brokers and traders, thus is providing a fair and neutral platform to effectively resolve complaints. Financial Commission ensures that traders and brokers are getting their disputes resolved in an efficient, unbiased, authentic, and a quick manner and walk away with a well-founded answer.

Details of 2016 Results

Below the Commission presents further details of its Annual Report for 2016, which also provides statistics on the number of complaints handled and key metrics regarding processing and mediation results. The statistics information is insightful to our Members and their clients, the public, and for brokerages that are considering the benefits of obtaining membership with the Financial Commission and/or are interested in learning about the organization’s structure.

2016 Complaint Statistics in Review

The need for transparency continues to grow. Building trust is crucial and using fair and neutral 3rd party dispute resolution – that Financial Commission provides – is an effective solution in cases where clients or brokers cannot resolve matters together and seek an independent channel and wish to avoid often complex legal or costly arbitration alternatives. The Financial Commission continues to achieve this objective by providing brokerages and technology firms with the benefits that accompany membership status, as seen in the statistics results for 2016.

A significant increase of 77% was achieved in the total number of complaints received in 2016 (165 complaints filed), compared Year-over-Year from 2015 (93 complaints filed). This nearly 80% increase was driven from the addition of new members reflecting the increasing credibility and positive reputation Financial Commission has been earning since its foundation, and coupled with market volatility from major geopolitical events during the year.

The monetary amounts for complaints filed during 2016 ranged from as low as $10 to as much as $57,199.00, and the total amount of compensation that was paid out was $157,326.00 from a total of 165 complaints filed.

Overview of 2016 Complaints Statistics:

Total Complaints filed 165 (100%)

Total amount of compensations $157,326.00

Total amount of resolutions (against Members)

Types of Complaints

Trading complaints are directly related to the process of trading on the market and the affect of execution of orders, payment of margins, calculation of commissions, forced liquidation of positions and other parts of the trade cycle. These complaints are considered by the Dispute Resolution Committee and included in the statistics.

Total amount of trading complaints 57:

Financial complaints are related to transactions on the account, and in majority of cases involve delays in withdrawals. Such complaints do not fall under dispute resolution process; however, the Financial Commission never rejects such complaints and helps advocate the payment process with clients till the end. We do not record cases of non-payment of funds to the clients by Member-companies. Nevertheless, in cases when such complaints are received against non-member companies providing of a refund to the client from the broker is often very problematic.

Total amount of financial complaints 56:

Non-trading complaints are often clients’ complaints about the facts of losses incurred as a result of cooperation with the administering traders and sales consultants. To a lesser extent these are complaints for automatic copying transactions systems and signaling services. Such complaints do not fall under the dispute resolution process; however, we always analyze the contract, risks warning, correspondence and negotiations with the client and also give our assessment of the situation and recommendations for a possible settlement of the dispute.

Total amount of non-trading complaints 52:

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Event Participations and Important Meetings in 2016

IfX 2016

Financial Commission was one of the exhibitors at the 2016 iFX Expo in Hong Kong which took place at the end of January, followed by the 2016 iFX Expo in Cyprus in May. The main focus of these events were recent developments within the online trading industry including challenges, opportunities and ongoing trends discussed among market participants.

Financial Commission’s stand was in a very prominent location during the Cyprus event and benefitted from the increased exposure to the event’s industry delegates. The collective feedback that Financial Commission received during these events from industry media resources, attendees, and fund managers was highly supportive. Chairman Peter Tatarnikov had an opportunity to give a few interviews during the Cyprus event including to local TV channels as well as to Internet media resources for the financial industry.

 

image After participating at the Cyprus conference, on July 22nd, 2016, in Minsk, Belarus, Financial Commission signed a Memorandum of Understanding (MoU) with the Association of Financial Market Development (ARFIN). The MoU provides a basis to develop favourable conditions to support the Foreign Exchange market for ARFIN members and was signed during a meeting between Financial Commission Chairman, Peter Tatarnikov, ARFIN Chairman, Alexey Sidorov and representatives of the National Bank of the Republic of Belarus. The MoU will enable cooperation to improve the dispute resolution process in Belarus, and the exchange of information between both organizations.
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On October 12th, 2016 Peter Tatarnikov, Chairman of the Financial Commission (FinaCom PLC) took part in the press lunch dated for discussion of the bill on forex market regulation in Kiev, Ukraine. During the event such topics as lack of the legislation regulating forex market in Ukraine, vulnerability of private investors, the most effective approaches to forex market regulation and the liability of Ukraine towards investors were discussed. 

Participants of the event announced their visions of the forex market and regulatory challenges on the territory of Ukraine, while sharing their international experience, answering journalists’ questions and providing several examples of forex regulation in Western countries.

Mr. Tatarnikov expressed his opinion – during the press lunch – concerning the need of creating a compensational fund, which would enable clients of financial services providers to be compensated in case of bankruptcy of their financial services provider. The event was also attended by Roberto d’Ambrosio – CEO of Alpari Research, Vitaly Shapran, member of the Executive Committee of Ukrainian society of financial analysts (USFA) and Natalia Evseeva – Director of Alpari official partner in Kiev. The gathering had also been widely reported in many Ukrainian media, including: Finance.ua, Business capital, Hubs, Business channel and other media outlets.

New Member Announcements in 2016

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Appointments Made to the DRC in 2016

 

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Vadim Sviderski, Editor, Finance Magnates



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Peg Reed, COO, Forex Development Corporation                                                                                                    



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Nir Porat, Co-Managing Partner, Ben Basat, Porat & Co                                                                                    

Current Members of the Dispute Resolution Committee (DRC)

  1. Anatoly Bulanov – Head of Dispute Resolution Committee 
  2. Ilan Azbel – CEO, AutoChartist
  3. Carl Elsammak – CEO, Kammas Trading
  4. Simon Grunfeld  – Founder, Gallant Partners
  5. Andrew Ralich – Co-Founder, oneZero Financial
  6. Lior Nabat  CEO, Tradency
  7. Aleksey Kutsenko – CEO, Tools4Brokers
  8. Juan Pablo Jutgla – CEO, Better Way FX Consulting
  9. Akin Abbak – Managing Partner,  Abbak Attorneys at Law 
  10. Kristina Nettles – Vice President, Integral
  11. Nir Porat – Co-Managing Partner at Ben Basat, Porat & Co.
  12. Peg Reed – COO, Forex Development Corporation
  13. Vadim Sviderski  Editor, Finance Magnates

2017 Outlook: Wave of Changes to FX and CFD Markets, and Trump Geopolitics

There is a clear shift towards a further reduction in leverage that is gaining momentum in various jurisdictions. Furthermore, the marketing of Forex and CFD trading is becoming increasingly regulated to help counter the significant degree of misleading advertising that is still prevalent in the online brokerage industry – albeit mostly from unregulated firms including binary options providers or in regulated environments that lack marketing guidelines.

Moreover, the recent expulsion from the National Futures Association (NFA) – a membership-based self-regulatory organization (SRO) in the United States, of online FX and CFD broker FXCM, a Nasdaq-listed company, highlights another major challenge that is prevalent in the industry – brokers claiming to offer agency execution who are routing orders to a 3rd party dealer where the agency broker has common ownership in that dealer.

While draconian measures may be taken by various regulators to eradicate these challenges, it will also likely add a notable compliance burden to firms in terms of increased time and effort (manpower) that will be needed to adhere to stringent compliance requirements with regard to order routing, execution, risk-management, disclosure requirements, and other such costs that will lead to an increase in regulatory compliance expenses.

For brokerages operating in less stringent regulatory environments and jurisdictions where no such formal rules have been outlined, there will be even more difficult challenges ahead in distinguishing a genuine offering from firms purporting to be legitimate brokerages – yet who are not, increasing the need for acquiring regulatory licenses from a bona-fide regulatory hub, and becoming members of independent SROs, as a means to demonstrate a firm commitment to compliance and best practices to win and maintain clients’ trust.

While there remains uncertainty in how the Trump administration would go about repealing parts of the Dodd-Frank Act in terms of the Wall Street Reform and Consumer Protection Act, a repeal would directly affect the global online brokerage industry. One school of thought holds that this could benefit brokerages that will be able to provide clients a greater degree of trading freedom while having less compliance burden.

Another school of thought is that loosening regulations in the US could increase chances of unfair dealing where greater risk falls on the client and away from the broker. A repeal of Dodd-Frank could possibly spark a global race where regulators in Europe and Asia roll-back restrictions to avoid regulatory arbitrage where consumers and brokerages may seek more favorably conditions in the U.S.  

As reiterated in Financial Commission’s 2015 report and here again for 2016, online brokerages who put their clients’ interests first, whether agency brokers, market-makers or those who operate a hybrid-model, as well as technology providers that develop trading platform, by joining the Financial Commission demonstrate a firm commitment to clients and help support customer education efforts where the foundation of trust is built on understanding.

With financial product complexity on the rise, client education has never been more important when it comes to understanding the details of how an investment product works, including a broker’s procedures, processes including their internal controls – which can all affect how products are handled and what is permitted.

Financial Commission continues to strive to educate clients, and brokers, and support related initiatives while holding brokers to high standard and investigating each case thoroughly using a proven approach to the dispute resolution process and in a new era of geopolitical uncertainties and market volatility as 2017 is underway.

2016 Annual Report Closing Remarks from Financial Commission Chairman

“We are delighted to share the results of another successful year marked by further growth in key areas of operations, as highlighted in our 2016 annual report. Thanks to the support from our members, staff, and the online forex and CFD industry at large, Financial Commission continues to deliver an essential service to market participants, and against the backdrop of challenging market conditions including a shifting regulatory landscape.

A promising new year is already underway with new members approved, additions made to our in-house staff, and strategic objectives outlined to help sustain our momentum from 2016 through the end of 2017 and forward.

As the focus on best-execution practices and price discovery came under the spotlight from the Global FX Code initiative, this is an area that we have been working with for several years already, and are well-positioned to continue to support companies and customers to help resolve trade-related disputes to help ensure fair dealing is being upheld.

We also commend other global initiatives underway such as the IOSCO survey surrounding derivatives that concluded in December 2016, regarding margin FX and OTC products, aimed to help increase awareness and enhance regulatory reforms and improve market integrity while best supporting companies and the customers they serve.

I stand behind what I voiced last year and reiterate that we welcome brokerages and technology providers, whether regulated, unregulated, or self-regulated, to submit their membership application to Financial Commission, and review our requirements to see if your firm will qualify for approval. Approved members show a firm commitment to their customer, by adding an extra level of support where Financial Commission will stand by both sides in cases where a complaint is brought, and with the aim to bring it to resolution quickly and fairly.”

Peter Tatarnikov,

Chairman,

Financial Commission

To learn more about the benefits and requirements of joining the Financial Commission, available for brokerages and technology providers, contact us and visit www.financialcommission.org

2015 Membership Growth, New Appointments, Key Events and Industry Observations

February 4 2016: New York & Hong Kong: FinaCom PLC, operator of the Financial Commission (FinancialCommission.org) – the first independent neutral mediator for multi-asset brokers offering Forex, CFD’s, Binary Options and Cryptocurrency, announces today its Annual Report for 2015.

Presented here below, Financial Commission’s 2015 annual report highlights another outstanding year which further solidified the need for increased self-regulatory efforts, such as the benefits provided by the Financial Commission to its members – who join and maintain membership voluntarily while adhering to strict guidelines.

About the Financial Commission

FullSizeRender The Financial Commission provides an unparalleled dispute resolution process between online brokerages and their end-customers and encompassing a wide range of complaints-processing related to product, market and pricing related issues brought by financial market participants. The Commission guarantees protection of the interests of both brokers and traders, thus providing a fair and neutral platform to effectively resolve complaints.

Key Milestones in 2015: Growth Channels

2015 saw growth across many of Financial Commission’s key business drivers including the number of important news that was reported on the website of the Financial Commission during the year that aided the organization’s developments.

New appointments to the Dispute Resolution Committee (DRC) were made during 2015, and three new members of the Commission were approved, bringing the current total number to fifteen members. In addition, Financial Commission participated in key industry events across the globe, meeting with clients and members at important industry conferences.

Below the Commission presents its Annual Report for 2015, which also provides statistics on the number of complaints handled and key metrics regarding processing and mediation results.

The statistics information is insightful to our Members, their clients and the public, and for brokerages that are considering the benefits of obtaining membership with the Financial Commission, and interested in learning about the organization’s structure.

Complaint Statistics for 2015 in Review

The need for transparency continues to grow. Building trust is more important than ever, and a using fair and neutral 3rd party dispute resolution – that Financial Commission provides – is an effective solution in cases where clients or brokers cannot resolve matters together and seek an independent channel, and wish to avoid often complex legal or costly arbitration alternatives. The Financial Commission continues to achieve this objective – by providing brokerages and technology firms with the benefits that accompany membership status – and as seen in the statistics reviewed for 2015.

60% higher Year-over-Year (YOY), a significant increase in the total number of complaints received in 2015, 18% YOY increase in the proportion of complaints that escalated to the Arbitration Committee. The increase was mainly fueled by the addition of new members, when compared to the prior year.

The monetary amounts of complaints filed during 2015 ranged between $27 to $40482, from a total of 93 complaints filed.

From the total number of complaints, 82 were Forex related, and the remaining 11 were related to Binary Options trading.

73 complaints were successfully resolved through the Financial Commission Dispute Resolution Process, and 1 still remain in progress (as of this writing), and 15 complaints lacked sufficient information to further proceed. Overall, from the number of complaints that met the information requirements to proceed nearly all have been successfully processed with one case still in progress and pending resolution.

General complaints Statistics:

Summing up 2015, several important points and trends are noted in the activity of the Financial Commission below:

Complaints Related to Stop-Out Liquidations

Just as in 2014 a significant portion of complaints (about 25%) were related to the problem of forced liquidation of clients’ positions by brokers in view of margin deficit (also known as “stop-out”).

Traders often do not pay enough attention to the risk management and consequently get a stop-out from the combined leverage and/or market volatility that can turn even a small position into a huge loss forcing a liquidative margin call or stop-out to occur.

This can either happen quickly on large positions – even with stop-loss orders attached – or over a long period of time (or sooner) when a stop-loss order is not attached to a trade.  The main risk factors that are overlooked by traders with lack of experience are:

It’s important to note how while the mechanism of Stop Out (i.e. margin-call or liquidation-call)  may vary by broker, the main proponents are to protect the brokers trading capital and the client’s capital from adverse price fluctuations.

Background on Stop-Out Liquidations:

The liquidation of trades that occur when a stop-out (i.e. margin call or liquidation call)  is triggered attempts to act as a sort of insurance in the form of a financial airbag or safety net that is used by the parties of transactions in situations that could otherwise cause a deficit balance or more substantial loss.

Quite often the situation is such that if the broker does not forcibly close the loss-making positions of the client, the client’s losses will exceed the amount of the available margin (or cash deposit) in their account, and consequently, the broker will have to cover this difference at their own expense or based on the customer agreement if enforceable.

The most common reason for closing positions by Stop Out or Liquidation Call is that during the period of increased market volatility the amount of spread on financial instruments is expanding as well as the price itself moving rapidly.

As a consequence, having an opened position or several opened positions, can add to the amount of floating loss (or Marked-to-Market) into the unrealized Profit and Loss (P&L) total, while the amount of floating income – if any – is falling or offset by a larger degree.

The consequence or cause of this phenomenon is mainly lack of margin – as the available margin is eaten up by the floating losses thus creating the stop-out scenario, without which could not prevent to attempt to stop a negative balance from occurring.

Thus, when the ratio of Equity/Margin (cash equity including floating P&L relative to margin collateral used for opened positions) falls below the critical stop-out level (triggering a liquidation) defined by the broker, then the closure (stop-out) of unprofitable positions of the client occurs, or in some cases all positions may be closed during the stop-out event (depending on the broker/customer agreement) and stop-out/margin-call policy (and level or percentage).

News-Driven Increased Market Volatility

The publication of important economic and political news continues to attract many novice traders who are trying to earn large sums in short periods of time, based on the sharp fluctuations in price. However, it is necessary to understand that in such market conditions slips and expansion of the spread often occurs, among other risks during new events.

These events have been the main cause of market volatility contributing to the Stop Out or Liquidation calls examined by the Financial Commission’s 2015 complaint findings.

One of the complaints received recently by the Financial Commission deserves special attention, although it belongs to the type of complaints described above.

The situation faced by the client is extraordinary in the sense that Stop Out was made due to the specific queue of pending orders caught in a price gap. In this particular case several client’s pending orders of different volumes got caught in the price gap generated immediately after the publication of Non-Farm Employment report in the US. As a result, all pending orders were activated on the broker’s server simultaneously. However, the first order executed was the maximum volume order, but not the order that was the first in terms of the order price. Consequently, the margin deficit appeared on the client’s account, resulting in Stop Out. For instance, on the interbank market in the situation similar to the above-mentioned – it is more likely that the larger volume order would be executed first as it corresponds with the logic of the market. The technology of execution of orders/transactions is structured in a way where orders/transactions of a larger volume are executed first and only afterwards the smaller volume orders/transactions could be executed at prices that remained.

The Financial Commission notes that, in 2015 one of the problems that traders continue to face is the delay in payments of earned income and the remaining trading capital by dishonest brokers. It is important to say that none of these complaints were brought against member-brokers of the Financial Commission.

Broker Deposit Bonus Promotion Disputes:

Apart from the cases mentioned above, the Financial Commission received complaints on the brokers’ rejections to pay rewards citing violation of regulations set in some bonus programs offered. It should be noted that in some cases the terms and conditions were insufficient.

The Financial Commission strongly recommends that the brokers should describe such regulations or terms and conditions very carefully to clients, and also use various examples of trading requirement calculations (for bonus redemption) for a clearer perception of the information by the clients. This will help to avoid misinterpretation of data and reduce the number of disputes as well as the reputational risks for companies, or any stigma left on the bonus promotions industry-wide.

At the same time the Financial Commission strongly recommends that the clients should carefully study the conditions offered by brokers’ bonus programs and ask clarifying questions via e-mail or other recorded transcripts. If the communication with the company’s representatives is carried out via online chat, the client has to be sure that he keeps a log of the discussion for reference. This will help to protect clients’ interests if a dispute arises, and lessen the need for a complaint.

Special attention has to be paid to the bonus programs which restrict client’s access to their own funds. Typically, these promotion programs offer incredibly high bonuses (up to 100% of the deposit amount) and signing of a separate contract with the broker, and require clients to perform certain actions. Financial Commission found that in most cases the requirements put forward by the brokers were extremely high and led to a situations where the client had to make a large number of transactions (pay high commissions) and/or meet specific total trading volume thresholds, before getting access to their funds.

In other words, the client guarantees to pay commission to the broker, thus putting himself in a vulnerable position where the high-trading requirements add further pressure and increased risk. The Financial Commission does not encourage such programs and calls on clients to study the proposed conditions very carefully and decide whether the requirements warrant the effort and based on their experience and skill level. Ask your broker to show you the size of the required fees and required trading volume in US dollars, and also specify whether the bonus funds cover possible losses from trading operations.

Participation in Forex Industry Conferences in 2015

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In June, the Financial Commission participated in international forex conference FXIC in New York. On the agenda of the conference was innovations in trading technologies, development of international forex regulations as well as the development of cryptocurrency as a modern financial instrument.

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In October, the Financial Commission visited the MICEX forum in New York. The forum highlighted the success of modernization of Russian market infrastructure, problems of corporate governance that Russia continue to face and growth of domestic investors base.

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In November, the Financial Commission participated in Forex Magnates London event which was visited by over 1000 professionals from the online brokerage industry.  Broker-Members of the Financial Commission were able to meet with the organization’s representatives, including DRC members who were present and had visited the Commission’s dedicated exhibitor booth, including firms that cater to traders in forex, CFD, Binary options and Cryptocurrency markets.

 

Key Appointments

August: Maor Lahav – COO and co-founder of Panda Trading Systems in Haifa, Israel, has joined the Dispute Resolution Committee (DRC) of the Financial Commission.

October: Financial Commission Chairman Peter Tatarnikov joins CRFIN advisory board. In August of the same year, the Financial Commission and CRFIN announced a partnership.

December: Kristina Nettles, Vice President of Integral Development Corp, Palo Alto, CA United States, has joined the Dispute Resolution Committee (DRC).

New Member Announcements during 2015

December: NPBFX is an international forex broker registered in Belize and regulated by International Financial Services Commission has joined the Financial Commission.

December: ЕQMarkets (Infinity Trade LTD) registered office is located in Saint Vincent and the Grenadines, has joined the Financial Commission.

November: AITS FX is the new global brand in forex industry, which is located in Saint Vincent and the Grenadines, has joined the Financial Commission.

Current Members of the Financial Commission

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Current Members of the Dispute Resolution Committee (DRC)

  1. Anatoly Bulanov – Head of Dispute Resolution Committee 
  2. Ilan Azbel – CEO, AutoChartist
  3. Francesc Riverola – CEO, FX Street 
  4. Carl Elsammak – CEO, Kammas Trading
  5. Ilya Sorokin – CEO, ACT Forex 
  6. Simon Grunfeld   Founder, Gallant Partners
  7. Andrew Ralich – Co-Founder, oneZero Financial
  8. Lior Nabat CEO, Tradency
  9. Aleksey Kutsenko – CEO, Tools4Brokers
  10. Maor Lahav – COO/co-founder, Panda Trading Systems
  11. Juan Pablo Jutgla – CEO, Better Way FX Consulting
  12. Akin Abbak – Managing Partner,  Abbak Attorneys at Law 
  13. Kristina Nettles – Vice President, Integral

 

2016 Outlook: Expansion, Volatility, and Client Education

With 2016 already underway, the Financial Commission had just returned at the end of January after successfully participating as an exhibitor at the iFX Expo in Hong Kong.

The event marked expansion in Asia for the Financial Commission as new agreements were reached with providers in the region, and as the online brokerage industry sees strong demand in Asia. The growth noted both at the event and in the media – included from China and ASEAN countries, and as a large percentage of the world population circles within a dense area of East Asia where brokers eye to acquire new and existing market-share. The iFX expo event took place within the major financial hub that Hong Kong is, and at the modern Hong Kong Exhibition Centre in the city’s financial district.

In addition to future participation in key industry events during 2016, Financial Commission expects to see continued interest from brokers both in Asia, Africa, and Europe, as well as from the Americas, where both technology providers and brokers aim to build trust and integrity with their clients by taking steps to improve credibility and transparency.

Brand promise steps revolve around product offerings (marketing), sales efforts, customer support and retention, and include broker’s own steps from self-regulatory compliance,  obligatory regulatory mandates, and voluntary efforts – such as afforded by membership with the Financial Commission.

Volatile Market Conditions in FX, and Global Stock Markets

The increased market volatility of 2015 continues to escalate into 2016 and is still accelerating and creating huge risk/reward opportunities for market participants and as higher volatility drives trading volumes and broker revenues. While this can be an exciting opportunity for new and experienced traders, such market conditions can also provide traders – especially new entrants – with either unrealistic expectations or the exact opposite – an unexpected market move and potentially substantial losses.

If 2015 taught traders one thing, following the CHF anomaly, and subsequent weekend-opening volatility surrounding the GREXIT crisis, clients need to be aware of the risks of holding open positions through news events and especially over weekends or when markets are closed.

Customer Education still Key Driver of Relationship and Sales

Online brokerages who put their clients interests first, whether agency brokers, market-maker or both, show a firm commitment when joining the Financial Commission, as do technology providers who aim to employ best practices.

Client education continues to be on the forefront of brokers concerns as it’s seen as both a tool to improve sales results and conversions, while reducing the chance of complaints from misunderstandings, or scenarios where clients had misinformation about a product or service (i.e. education improves retention rates and conversion).

Financial Commission continues to aim to educate clients and support related initiatives, as a large number of complaints are related to such issues – compared with purely technical complaints – as an example.

To learn more about the benefits and requirements of joining the Financial Commission, available for brokerages and technology providers, contact us and visit www.financialcommission.org

Closing Remarks from Financial Commission Chairman

“We are pleased to report a successful 2015 in our annual report, and as the value that Financial Commission brings to the online brokerage industry has proven to be of great importance to companies and their clients, and as evidenced by our expanded membership growth.

Over the last few years the Financial Commission has evolved from a core mission statement and set of standards, to provide the online trading community with a specialized and reliable alternative dispute resolution platform, and since then our fitness has strengthened to process complaints and handle membership needs and certifications more efficiently and effectively. We’ve achieved a reliable and robust organizational structure and look forward to an already promising 2016.

We welcome brokerages and technology providers, both regulated or unregulated, and self-regulated, to join the Financial Commission and by doing so to remind your clients of your commitment to them. We will stand by both of your sides in cases where a complaint is brought, and with the aim to bring it to resolution quickly and fairly.”

Peter Tatarnikov,

Chairman,

Financial Commission

New Markets, Members, Certifications, Educational Initiatives, Strategic Partnerships, and More During 2014

January 31 2015: New York & Hong Kong: FinaCom PLC, operator of the independent self-regulatory and dispute resolution organization, the Financial Commission (FinancialCommission.org) for Forex, CFD’s, Binary Options, and Cryptocurrency, today releases its 2014 Annual Report as presented here below.

Background:

Financial Commission, thru its offering to qualifying brokerages who meet and maintain the required criteria for membership within the organization, provides customers of member-firms the ability to seek a viable remedy via a free and fair dispute resolution process, when unable to resolve complaints directly with their broker.

2014 Overview:

During 2014 a number of major milestones unfolded, and as was reported on the Financial Commissions website during the year, such as new markets added and divisions created, in addition to the hiring of new staff, appointment of committee members, and strategic partnerships, as well as educational content and participation at several key industry events.

Below is a recap of our 2014 annual report for our members, their clients, and the public, and for brokerages that are considering the benefits of obtaining membership with the Financial Commission.

In addition, data compiled from various statistics related to complaints processing, the number of filings and other related metrics, presented below, can help provide a picture into the full year 2014.

Full Year 2014 Statistics in Review:

During 2014 a total of 58 complaints were filed in total, of which 37 were against current members, and whereas 21 were against non-members of Financial Commission.

The claims involved amounts ranging from as low as $24 to as a high as $119,259 during the year. In total, 53 number of the filed complaints were Forex related, and the remaining 5 were pertaining to Binary Options trading.

35  Complaints were successfully resolved, using the Financial Commission Dispute Resolution Process, and 1 complaint still remain in progress (as of this writing).

With a specialized focus in Forex, CFD’s, Binary Options, and Cryptocurrencies, Financial Commission continues to focus on growing its effort to help the online brokerage industry and benefit online brokers and their respective traders, by expanding its solutions to more and more companies, as well as enhancing the number of solutions the Financial Commission offers to its members.

In order to achieve this outcome, during 2014, the Financial Commission participated in a number of key forex conferences, appointed a new member to its DRC committee, and developed new methods to cover additional instruments and cater to a different segment of the market – related to binary options, by certifying platform technology.

Participation in Forex Industry Conferences in 2014:

  At the start of 2014, the Financial Commission participated in the iFX EXPO International Conference in Macau, an important industry conference in Asia bringing a diverse crowd of brokerages and platform vendors together in one place.

 


The FX Conference in Turkey, organized by Forex Magnates, was also another important event that the commission participated in, during the first half of 2014.

 

At FX Congress in Russia, organized by the first Russian SRO CRFIN, where Anatoly Bulanov Head of DRC presented a benchmarking study of various local dispute resolution examples, highlighting their advantages and disadvantages.

 

At the end of H1 2014 the Financial Commission participated at the iFX EXPO International in Cyprus, and Chairman Peter Tatarnikov was a speaker, and presented a keynote speech regarding the functions of the organization as part of the presentation.

 

booth2 In November, the Financial Commission exhibited at the Forex Magnates London Summit, and had a dedicated booth were attendees interacted with Financial Commission staff, in order to provide information and educational materials on membership benefits.

 

Educational Initiatives and Public Speaking:

Key Appointments:

  In June, Juan Jutgla become a member of the Financial Commission’s DRC

 

akin In October, Financial Commission announced it had appointed Akin Abbak to the DRC
 ZI Profile picture In December, Financial Commission announced the appointment of Zack Ioannou as Head of the DRC

 

New Solutions and Milestones:

 finCom_150 In July, the Financial Commission began publishing randomly selected complaints, that were subsequently anonymized in order to focus on the context of the issues that arose, and how they were later resolved through this unique mediation process.

 

finCom_150 During July the Financial Commission announced that it had underwent the process of certifying Binary Options platform technology, as a basis for helping to ensure binary options related complaints could be dealt with in an equitable manner, thus opening the doors for Binary Options brokers to become members.

 

Following the earlier announcement in July, The Financial Commission said it completed the first binary options certification process for the platform Binarystation for Binary Options, from the technology provider Binaryware LLC USA.

 

PeteriFXEXPO2 In August, the Financial Commission Announced the Launch of Educational Webinars, during which as series of webinars were conducted with Financial Commission Chairman Peter Tatarnikov.
 bitcoin The Financial Commission in early September announced the launch of the Crypto Division in order to provide its membership benefits to the Cryptocurrency industry, and in response to increased brokerage & trader demand of digital currency trading capabilities (such as Bitcoin,etc..).
Ibinex_Logo The Financial Commission announced at the end of September that it signed an agreement with Ibinex (www.Ibinex) to provide regulatory services and compliance oversight for its planned Cryptocurrency ECN. The Ibinex project was developed and managed by Gallant Partners (GP), and the solution will enable brokers to offer cryptocurrency related trading products through Ibinex’s regulated ECN
Earlier in October the Commission had announced the successful certification of technology provider Act Forex. The company’s platforms include spot Forex, Forex Options, Forex Forwards, CFDs, ETFs, Futures and cryptocurrency. ActTrader is compliant with NFA, FSA UK, FSA Japan, and MiFID, according to the company.

 

SealCTT In December, Financial Commission certified iBinex, a newly launched cryptocurrency ECN aimed to deliver liquidity to brokers for markets in Bitcoin and other cryptocurrencies that are becoming increasingly liquid and in-demand by traders.

 

 

New Member Announcements During 2014:

In January, Financial Commission announced new member: RoboForex
In September, Financial Commission announced new member: MTrading
In October, Financial Commission announced new Member: TraderGlobal

 

Member Firms at End of 2014:

  1. AForex
  2. Alpari
  3. FXOpen
  4. Lionstone Investment
  5. RoboForex 
  6. MTrading
  7. TraderGlobal

 

Certified Platforms:

  1. ActTrader Inc www.acttrader.com
  2. Binaryware LLC www.binarystation.com
  3. iBinex Ltd www.ibinex.com

 

Current Members of the Dispute Resolution Committee (DRC) include:

  1. Zack Ioannou – Head of the DRC
  1. Ilan Azbel – CEO, AutoChartist
  2. Francesc Riverola – CEO, FX Street
  3. Carl Elsammak – CEO, Kammas
  4. Ilya Sorokin – CEO, ACT Forex
  5. Simon Grunfeld – Founder – Gallant Partners
  6. Andrew Ralich – Co-Founder, oneZero Financial
  7. Lior Nabat – CEO, Tradency
  8. Aleksey Kutsenko – CEO, Tools4Brokers.com
  9. Kevin Millien – President, Millien Consulting Group
  10. Juan Pablo Jutgla – CEO Better Way FX Consulting
  11. Akin Abbak – Managing Partner,  Abbak Attorneys at Law

2015 Outlook:

As part of the organizations mission statement to help customers through educational channels while providing brokerages an alternative medium to resolve disputes efficiently, the Financial Commission plans to continue to enhance its ability to cater to traders from a diverse range of markets, and across popular trading instruments such as spot Forex, CFDs, Binary Options, and Cryptocurrencies.

More Than Just Alternative Dispute Resolution, and Outsourced Compliance, Financial Commission helps in Multiple Ways:

In a world saturated with online brokerage and websites marketing often-inaccurate information or through un-regulated jurisdictions, the need to screen and verify information related to trading becomes even more important – yet remains incredibly challenging. This challenge is even more pronounced for people with no trading experience (i.e. beginners) and even sometimes to those who are more advanced or with multiple brokerages accounts already.

For example, one recent event highlighted weaknesses in the system – in one area – after recent volatility in the Swiss Franc (CHF) caused a large gap in related forex market prices. This event caused significant losses to traders that were short the CHF, even causing negative balances for some, and reminded of the importance to read and understand the customer agreement and how it defines the scope of the relationship between a customer and their broker, and provides a legal basis for resolving complaints.

Recent Market Conditions in Early 2015 Highlight Importance of Education and Due Diligence

As a large number of customers as well as their brokers had incurred negative trading balances after the SNB discontinued the minimum rate for the EUR/CHF pair and the above mentioned market gap occurred, the amount of losses that brokerage firms and in some cases their clients had to absorb was staggering, and ranging in the hundreds of millions of dollars or even close or higher than $1billion as the damages are still being calculated, as reported by Forex Magnates in the days following.

This event with the CHF gap itself will be the subject of many future developments and changes related to how forex trading is conducted, and has already caused significant changes. Although it is not the first time the FX market has gapped – it was very significant.

The Financial Commission Role in Helping Brokers and Their Customers

The above mentioned CHF event also emphasizes why using an organization such as the Financial Commission can help mitigate the sometimes-often hidden risks contained within either a brokers’ customer-agreement and/or in the rate logic of how their trading platform handles and processes trading instructions or how it will implement any disaster recovery procedures when needed. This can be the difference between your broker going bankrupt or protecting itself and its clients from a market anomaly, and the steps that the Financial Commission takes for its membership requirements adds an extra layer of due diligence to help mitigate that risk or minimize it.

Closing Remarks

In 2015, in addition to the above mentioned reasons for us to continue to offer our membership to the online brokerage community, and to their clients, the organization is focused on adding more members, as well as certifying more trading platforms, and we are pleased to report that 2014 was a great success.  We are looking forward to a better year in 2015, and welcome the opportunity to serve you. To learn more contact us or visit FinancialCommission.org

A New Player in the Forex Scene – Six-Months Up and Running, with a Promising Future Ahead

In the industry of Forex, there is a distinct collection of entities that interact; the brokers (and IBs), the clients and the regulatory bodies. Like in every field or industry, friction and disputes do arise, and up till now – it has often been a long and rigid process to reach resolutions and manage disputes. Moreover, there has always been a veil of mystery around these disputes, with resolutions not being found, or even sought. This is where Financial Commission comes into the picture.

What the Financial Commission is all about

The Financial Commission is a neutral, third party dispute resolution entity in the field of Forex trading; solving disputes between traders and their brokers. A new player indeed, Financial Commission has filled a big vacuum of need in the industry. The Commission bases its philosophy on the following pillars:

1. Education. Knowledge is power. Oftentimes, disputes arise from a lack of knowledge or misunderstandings on the side of the traders, about how the Forex industry works. Slippage, pip spread, spikes and more could throw traders off track and cause them to believe there has been misconduct. Whether the dispute has arisen from a lack of knowledge or not, the disgruntled trader will in both cases feel acute lack of fairness. The Financial Commission has outlined its mission to give knowledge to the traders, so they are partners in their success, as opposed to mere onlookers, and never in the dark about how the industry works. On the other side of the same coin, Financial Commission educates its members on how to better communicate with their traders, in order to make the relationship a healthy two-way dialogue. For Financial Commission, education is of utmost importance due to its mission to deal with the root of the problems, rather than only providing on-the-spot solutions. This is the very philosophy that, for all parties involved, will transform our industry into a clearer and fairer one.

2. Transparency. Having a neutral, professional and unaffiliated body you can trust in this tumultuous world of Forex can make all the difference. The interest-free Financial Commission and the Dispute Resolution Committee (DRC) that is built up of a fascinating mosaic of experienced and esteemed figures in the industry, work together to review each and every case with one goal only; dispute resolution on the side of justice. With the bigger picture always in the background of making this industry clearer and granting traders more knowledge, Financial Commission zooms in on any complaint that arises in order to make sure that the parties walk away with the knowledge they need about the case, as well as an amicable and fair resolution. The healthiest dispute resolution that exists is one where a neutral body is pre-defined and gears into operation to objectively solve a dispute when needed. In the world of Forex, Financial Commission is it.

3. Swiftness and efficiency. The Financial Commission with the DRC at the heart of its operation works like clockwork on each and every complaint. In concretely organized steps, the DRC will reach a resolution of the case within several weeks, with intermediary milestones of communication along the way, with both sides of the dispute. Alongside the dedication to education and reliability, Financial Commission believes in the highest level of professionalism and meticulous conduct in every endeavor, in order to continue its impressive track record for years to come.

In Only Six Months, Impressive Results

During only six months of operation, the Financial Commission has resolved around 20 complaints from traders; most of which were only in the last 2 months. Alongside this, we are pleased to know that the traders’ community awareness regarding an independent arbitrator who can address their disputes against service providers in the financial markets has increased significantly. A remarkable fact is, that the bulk of claims are directly related to the most basic principles of Forex trading, which are still poorly understood by traders. This is purely in line with Financial Commission’s overall philosophy of giving education a major role within dispute resolution. Among these are some aspects of trading, such as execution of pending orders during the publication of important economic news, the way the margin for open positions is calculated in all trading platforms or for example, the purpose and the operation principle of Stop Out or Margin Call. Some traders get a better understanding of these things too late, and very often their open positions are closed by the broker because of lack of free margin. In this regard, the Financial Commission recommends that the brokerage companies pay more attention to the education of their customers. All brokers must do so in order to help their customers avoid some unpleasant situations while trading.

In addition to offering a dispute resolution framework and enhancing the education of the traders in order to reduce the overall number of disputes and grievances in the long run, the most important aspect of this mechanism, is that it helps the brokers to retain their critical mass of clientele. That is, due to the fact that many small traders never actually file complaints, but simply leave negative feedback in traders’ forums and spread the word in their communities, (often stemming from lack of knowledge), brokers could slowly but surely lose a significant number of traders, who will simply wander elsewhere in these cases.

Financial Commission also helps to expose new trends and phenomena that come up in the industry, based on the claims it receives. It is particularly interesting to note one category of claims, which included cases where clients of brokerage firms either intentionally or unknowingly used special software (Expert Advisors), which was designed to cheat, using trading technologies. The Financial Commission has taken a tough stance on this issue and believes that the use of such methods to generate profits is a violation of generally accepted norms and principles of doing business based on fair and mutually beneficial partnership. We feel it`s very important to mention here that Financial Commission may never be used as a bargaining tool for the traders who utilize such methods. The founders of the Financial Commission have repeatedly witnessed situations where a person using such techniques was identified and expelled from the ranks of customers of the affected companies. However, in some cases, such clients managed to withdraw some dishonest profits from their accounts. The official position of the Financial Commission on this issue is that on regulated markets such actions should be classified as fraud. Finally, we selected a specific category of claims related to failures in the technical provision of brokerage companies. Typically, such claims do not cause any problems and are resolved in favor of traders.

Looking at the final statistics on claims admitted to the Financial Commission during the period of its existence, around 26% of the claims were resolved in favor of traders .

In addition to the aforementioned claims, the Financial Commission has received 12 complaints from clients of brokerage firms, who are not yet members of our organization. The geographical span of these customers is very extensive; clients from Russia, other countries of Eastern Europe and the CIS, China and Southeast Asia, the Arab countries and more. This again reinforces that fact that the problem of lack of a fair dispute resolution mechanism, actually exists. We are communicating with brokerage companies from these regions and highly recommend to them to join the Financial Commission in order to further work together to solve these problems in a more efficient way. Finally, there is a mechanism to do so, which will be favorable for all.

The Members of the Financial Commission

Over the course of only six months, Financial Commission has already had the pleasure of welcoming seven of the biggest names of the industry as members, and the activity of the Financial Commission is gaining speed, as this new and exciting mechanism is gaining its well-deserved place on the map.

AForex, Alpari, FXOpen FXFair, Lionstone Investment ,MFX Broker and RoboForex are among the recent members to join the Commission, many of which have already experienced successful and satisfactory dispute resolution. The companies are from various regions around the world, and some are already members of local EDRs, yet still saw the need to join the Commission. This clearly reinforces the fact that the Commission fills an important need in the industry, and that its geographical grasp and popularity are spreading.

The Dispute Resolution Committee

The driving mechanism of the Commission as a whole is the Dispute Resolution Committee, the DRC. Top and esteemed figures from the industry; no less than the CEOs and Presidents of the leading Forex educational bodies and technical provider companies come together to make up the DRC, which solves each and every dispute that reaches it.

The disputes are addressed, investigated and solved by a combined endeavor of this impressive group of top figures. The goal is to create a framework where rich experience and knowledge are key, as well as giving a multi-dimensional view of every dispute, based on the variety and diversity of expertise these top figures bring with them, after years in their respective fields. When having one’s dispute resolved by the Financial Commission, and in essence by the DRC, every Forex trader knows that his/her dispute will be overseen by the absolute top levels, with the highest and most refined levels of expertise, and of course – with full neutrality and objectivity.

The Current DCR Members are:

Anatoly Bulanov – Head of the DRC

Ilan Azbel – CEO, AutoChartist

Francesc Riverola – CEO, FX Street

Carl Elsammak – CEO, Kammas

Ilya Sorokin – CEO, ACT Forex

Simon Grunfeld – Partner, Stone Street Solutions

Andrew Ralich – Co-Founder, oneZero Financial

Lior Nabat – CEO, Tradency

Aleksey Kutsenko – CEO, Tools4Brokers.com

Kevin Millien – President, Millien Consulting Group

Financial Commission is on a constant quest to enrich the DRC, by welcoming no less than the very top figures of the industry. These leading individuals in the field come together to form the ultimate dispute resolution setting; a trader or broker could not ask for more.  The accumulated years of experience and profound knowledge, sitting in one room, to deal with each and every dispute is the very reason why the Financial Commission has made such a grand appearance on the scene of the Forex industry.

The DRC is expanding and enriching its collection of members, and this manifests itself especially in the latest new appointment; Anatoly Bulanov as the Head of the DRC. Mr. Bulanov is a well-known figure in the industry, having over a decade and a half’s worth of acumen; with an emphasis on traders’ education, live trading, analysis and the technical aspects of trading and platforms as well.

Financial Commission in the Press

With the appearance of the unique Financial Commission onto the scene, the media and press have noted this as a turning point in the field and have been covering its developments closely. Big names in the media such as the examples below, have been seeking to tell the FX world about the Commission and its mission;

FXStreet; “if the commission should succeed, no doubt it is a good and a right step towards making FX a real asset class for traders all over the world”

iLearney alluded to the importance of Financial Commission’s role in Russia; “protecting the rights of the traders and investors is vital, because according to experts, Russia has around 400 thousand people in the FX industry, and with this growth brings with it a higher number of claims against brokers”

Interfax, a leading news agency in Russia, has been following Financial Commission and included its developments in their prestigious Annual FX Market Development Research outlining the fact that Financial Commission is an important and effective tool in the field of Forex, bridging traders and brokers and playing a crucial role.

In addition to this buzz in the media, Financial Commission is invited to many global FX events and Conferences; the Forex Magnates Summits in London and Tokyo in 2013, as well as the iFX expo in Macau, 2014 are just a few examples of the global presence Financial Commission has gained in the industry.

Financial Commission has received vast support from the industry, on regional and international levels, and this reinforces the notion that this unique type of operation is much needed in the FX field and shows very clearly, where it is going from here.

At the Start of 2014; Looking Forward

After six months, it is safe to say that the Financial Commission has paved its way into the Forex industry, and was certainly welcomed by it. It is clear that the need for neutral and hassle-free dispute resolution has been around for a while, and the time has come to address this need. As the famous phrase says; “necessity is the mother of invention” – this was indeed the case in the creation and introduction of this first-ever neutral and professional dispute resolution body, which seeks to resolve disputes as well as transform the whole industry and the way Forex traders’ grievances are addressed and handled. Looking forward to following years, the Financial Commission will be welcoming additional members, and will be expanding its activity to more and more geographical locations.

Most importantly, and being the very fabric of the Financial Commission’s activity, the Commission will be responsible for a new way of thinking. Finally, for the traders, there is a body, which is there to resolve disputes. For the brokers, there is a way to show reliability and enhance credibility and thus confidence, for existing and potential clients. In addition to constant expansion and global exposure, Financial Commission is also enhancing its capabilities on a professional and technical level. That is, Financial Commission is extending its operation to cover more financial instruments and trading mechanisms, as well as branching out to more and more areas within the FX industry where disputes could arise.