Category Archives: Company News

Financial Commission Certifies Trading Platform Provided by Umstel

August 15th, 2017, The Financial Commission, a leading financial services independent external dispute resolution (EDR) organization, today announced the successful certification of trading platform provided by Umstel.

 

umstel-logo The Financial Commission conducted its rigorous review of Umstel’s trading platform, to ensure they met the technical information requirements of the Commission’s technology certification evaluation process. The Financial Commission established a comprehensive list of points to verify including system security, capacity, business disaster recovery and a continuity plan, as well as reporting and record keeping, among other fields deemed important to certify.

 

Financial Commission Chairman Peter Tatarnikov said regarding the new certification, “In order to provide traders with fair dispute resolution we must fully understand their system’s construction and working process. Umstel’s trading platform is the latest technology certified by the Financial Commission. We will be happy to see more software providers certifying their products with us. Today we gladly announce successful certification of Umstel’s trading platform and believe it is a great step to leverage its credibility and grow its business globally.”

About Umstel

Umstel DMA multi-asset web based trading platform developed for financial institutes features one of the fastest industry web based financial charts and advanced technical analysis tools including 33 technical indicators, 30 technical objects and 9 default 100+ custom timeframe. The platform also supports multi chart mode instantly changing chart layouts in one click. The mode supports up to 6 charts. All charts can be linked  to an instrument that user selects in terminal workspaces. As a result, a click on the instrument ticker refreshes charts with corresponded instrument, no need to spend time for typing. Umstel supports following types of orders: Market, Limit & Stop. Orders executed directly on stock exchanges within milliseconds. The best execution price guaranteed by exchange. Umstel features custom and system watchlists. User can edit custom watchlists by adding/removing instruments. System watchlists like Top losers, Top gainers, Volume leaders updated by system in real-time.

About Financial Commission

The Financial Commission is an external dispute resolution (EDR) organization for consumers/traders who are unable to resolve disputes with financial services providers that are members of the Financial Commission. The Financial Commission set out to provide a new approach for traders and brokers alike to resolve any issues that arise in the course of trading the Forex market. The Financial Commission was established to be a neutral 3rd party committee to fairly review and resolve complaints in an effort to facilitate a simpler, swifter resolution than through industry regulators and the legal system.

Technology developers seeking membership status with the Financial Commission can learn more about the process and expected requirements as part of the technology certification process in advance of applying for membership or in the preparation of submitting an application.

For more information, please contact The Financial Commission: info@financialcommission.org

The Future of Forex Market: Does the Industry Have a Chance?

August 15th, 2017 Financial Commission, a leading external dispute resolution (EDR) organization catering to the financial services industry, operated by FinaCom PLC, announces the convening of roundtable on August, 29 at 6 pm (Moscow time) to discuss how forex business may develop in the environment of stricter regulation both in Russia and globally.

Stricter regulation of the forex market both in Russia and globally calls into question the existence of many brokerage companies. Leading experts in the industry will gather at the roundtable on August, 29 at 6 pm (Moscow time) to discuss how forex business may develop in such environment, what regions are attractive for entrance and how to promote such services. Petr Tatarnikov, Chairman of the Board of Directors of the Financial Commission, Nikolai Isaev, CEO of the Dartek Consulting, and Valentina Drofa, Director General of Drofa communications agency will take part in the event. The round table will be an online event.

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“With the start of the market regulation era in Russia and tightening of the business in the UK and Europe in general, forex companies costs have significantly increased. However, there are still chances for development: for example, the US market can be opened for new players because of the abolition of the Dodd-Frank law, besides some peripheral Russian-speaking countries show some interest in forex. Which markets to enter and how exactly to do it, will be discussed in detail at our event,” Peter Tatarnikov commented.

 

 

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“Access to the market for unregulated participants will soon be closed completely. What alternative jurisdictions may be of interest, what is the stand of the Russian regulator on the matter of forex industry and what to do with tools that are not yet affected by the law, meaning e.g. binary options – here is a far from complete list of issues to discuss during the round table, Isayev adds.

 

 

drofa

“The idea of the event surfaced as a result of my communication with the owners of forex companies over the past 3-4 months. The key question everybody asks now – how to work to remain effective in the ever tighter environment. In order to give the most information on the issue, we decided to gather experts in one place and to talk about how we see the development of the industry, ” Valentina Drofa says.

 

The round table is intended for owners and employees of financial companies only. Registration for the event is required. You can register by the link http://toomuchmoney.ru/

For details of participation, please, call +7499 110 41 72

INDUSTRY ALERT: 24/7 Options Trade Added to Warning List

August 10, 2017: Financial Commission adds 24/7 Options Trade to its Warning List

 

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About Warning List

The warning list is to inform the public of companies that we do not recommend to trade with, following numerous reports and complaints filed by customers regarding non-member firms concerning fraud or wrongdoing, which includes the conduct listed below:

  • Ponzi scheme, Pyramid Scheme, or a High-Yield Investment Program
  • Theft or misappropriation of funds
  • Fraudulent or unlicensed offering
  • False or misleading statements about a company
  • Other fraudulent conduct

Financial Commission Announces MTrading’s Membership Withdrawn

August 10th, 2017 Financial Commission, a leading external dispute resolution (EDR) organization catering to the financial services industry, operated by FinaCom PLC, today announces that the membership status of ServiceCom LTD (MTrading) has ceased following a voluntary withdrawal.

Mtrading_Horizontal_logo

MTrading had met its obligations as a Financial Commission member in all cases where complaints had been brought forward against the broker up until August 9th, 2017 when its membership was effectively withdrawn.

Financial Commission notes that it will not be able to process any new complaints from MTrading, following its voluntary withdrawal of membership from Financial Commission as of the date of this announcement and moving forward or until membership is approved again.

Furthermore, MTrading’s clients will not be eligible for reimbursement from Financial Commission’s compensation fund as a non-member, since the compensation fund can only be used by clients of approved members, and subject to ruling by our Dispute Resolution Committee. The compensation fund is designed to help protect members’ clients in exceptional cases and is funded by Financial Commission from a portion of membership dues.

An updated list of current and prior members can be found on FinancialCommission.org, including members that have either been expelled, suspended, or withdrawn voluntarily.

Financial Commission is a leading independent self-regulatory organization whose members include online brokerages and exchanges, across Forex, CFDs, derivative and cryptocurrency markets, as well as certified providers and developers of trading platform technology used by members and their end-clients who are retail traders and investors.

Financial Commission requires that member firms strictly adhere to membership rules to maintain good standing on an ongoing basis. To learn more about our membership requirements and certification process, contact us or visit  https://financialcommission.org

Financial Commission Supports Recent Findings in Forex/CFD Report Comparing Jurisdictions

August 3, 2017: Financial Commission, a leading External Dispute Resolution (EDR) organization, operated by FinaCom PLC, servicing online Forex and CFD brokerages and technology providers within the financial services industry, today announces support for the recent findings in a report published by Traction Fintech.

A recent article was published by regulatory compliance specialist Traction Fintech, which examined differences between over-the-counter (OTC) leveraged derivatives such as contracts for difference (CFD) including forex across four jurisdictions.

The full report referenced in the article was authored by James O’Neill, a director of the Australian-based broker ILQ and compared requirements related to client money handling, fair market pricing, leverage, and capital requirements across Australia, Cyprus, the United Kingdom (UK) and the United States (US).

Financial Commission supports the need for jurisdictions to improve rules surrounding client money handling and fair price discovery methods (such as the Global FX Code) to help uphold best execution at global forex and CFD brokerages, among other topics explored in the report.

Comparing Four Major Jurisdictions

A table in the article, which can be seen below, provides a high-level overview of the differences across each country and comes shortly after Australia’s government revised legislation under the Corporations Act related to how trust accounts are handled aimed to help safeguard client funds.

 

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Fair pricing and execution

The author of the report noted that Cyprus and Australia underperform in ensuring fair and transparent pricing by brokers, compared to the United States and the United Kingdom, and suggested that Australia consider specific rules to address its mandate under rule 912(1)(a). For example, the current definition of market making in Australia is very general and would make it hard to contest asymmetric slippage in terms of infringing on the mandate.

The author added that the obligations in Cyprus’ regulations – namely article 36 of the Investment Services and Activities and Regulated Markets Law of 2007, go beyond the Australian equivalent when it comes to asymmetric price slippage when executing client’s orders (although both trailed behind the US and the UK).

In terms of comparing differences in how customer monies are handled in each jurisdiction by authorized brokerages, the author argued some of the advantages and disadvantages of allowing brokers to add capital to help buffer client’s accounts to avoid a shortfall.

Account buffering and trust account rules

For example, in the case of trust accounts in the US where buffering is permitted – a broker can commingle its own money into client’s accounts to help maintain excess capital and avoid a shortfall in the required margin (i.e. during periods of high volatility).

The author argued that commingling a broker’s own money into clients trust accounts could blur the line between the funds belonging to the trust and that of the broker’s money in the case of insolvency.

Meanwhile, brokers that can use client money to hedge and for margining purpose endorses the idea that not all brokers who are the counterparty to a client’s trade are acting as market-makers.

Furthermore, permitting the use of client funds for hedging and margining could blur the line between proprietary trading and the hedging that is common for a matched principal. The author also pointed out the systemic risk that exists with client segregated accounts when the funds are pooled together in the same account, and how this could be remedied if it was required that each client’s funds be held in a separate bank account.

Cathie Armour, a Commissioner at the Australian Securities and Investment Commission (ASIC) commented regarding the rule changes: “The amendments to the client money regime made in the Bill have strengthened the protection of client money that is provided to retail derivative clients. Doing so will help to increase investor confidence in the Australian financial system.”

Sophie Gerber, Director of Traction Fintech commented in the article, “This has been a very divisive issue in the industry.  What may have been a more beneficial approach to this issue would be to have disallowed the use of the Corporations Act provisions for using client money for margining/hedging etc. with related parties and also prohibiting the payment of any form of conflicted remuneration in these relationships.  Time will show us whether these reforms have or have not benefited the industry, I think, unfortunately, in this case, the retail client will not see any benefits, and over the next few years the outcomes will be reduced competition and increased costs.”

The author noted that despite the rule revisions client’s money is still pooled in the same bank account and not protected from counter-party risk in the case of broker insolvency. He added how ASIC’s prohibition of allowing a buffer contrasted with other jurisdictions where maintaining excess capital is required for instance in the US.

Leverage

As leveraged forex and CFD trading are done from a margin account, the minimum margin requirements often vary from broker to broker with a wave of restrictions in recent years reducing the maximum leverage that can be offered in different countries.

The author explained that leverage is often blamed as the cause for clients’ losses, and while such restrictions have been put in place in many major jurisdictions, the UK has yet to put in place a cap. And while high leverage has been appealing for many traders, in jurisdictions such as Japan, a reduction of leverage doesn’t appear to have hindered its retail forex industry, as lower leverage may have instead helped it become a more accepted asset class for household investors.

The article cited an extensive list of industry news articles including announcements from regulators, to see the full article click here.

© Traction Fintech

Financial Commission Adds Drofa CA to the Partners Section

August 2, 2017, Financial Commission, a leading External Dispute Resolution (EDR) catering to the online brokerage industry, operated by FinaCom PLC, today announces the addition of Communication Agency Drofa as an approved service provider to its Partners section on FinancialCommission.org.

Drofa Communication Agency Drofa helps companies and their top managers to become interesting for Mass Media and their target audiences. If you want people to know about you, CA Drofa will give you a helping hand.

Financial Commission has created its Partners section for service providers approved to offer their solutions to our members. DrofaCA is now available for our Members and provides such services as corporate PR, personal PR, special mass media projects, event planning, publishing and analysis and research.

The tasks of the agency in Finacom will include members consulting on promotion, PR, communication strategy building, as well as media support of the Financial Commission activities.

drofa “Partnership with Finacom is very honorable, as the organization brings together the best experts in the forex market, creating a unique professional environment for resolving disputes in financial markets. Now our agency is also among those who influence the global development of forex, which means that our clients will have access to even more useful services available not only in Russia but also in international markets,” says Valentina Drofa, Director General of Drofa CA.

 

peter Financial Commission Chairman, Peter Tatarnikov, said: “We recommend only professional partners to the members of the Financial Commission, and this is the case with Drofa CA. Our main goal is to increase confidence in the industry, and among other things, this is achieved by increasing the efficiency and transparency of each company on the market. The agency’s assistance in improving the internal processes of financial companies, marketing, positioning and financial services selling will certainly help in achieving the stated goals.

In addition, we want the general public to know about the activities of the Finacom, understanding our mission and objectives. We are pleased to welcome Drofa CA as our new Partner and believe that cooperation with Drofa will increase the awareness of financial services consumers about their free of charge tool to protect their rights.”

About Drofa CA

Agency was created in 2013. Before that, each partner worked in the finance field and promoted separate companies as well as their own projects. Over the years, the Agency managed to bring to market a number of new financial companies, increase sales figures of several brokerages and hold different conferences and forums.

CA Drofa will help you to:

  • Build or improve your reputation;
  • Create the public image of a leader;
  • Enhance your media profile;
  • Build relations with Mass Media and the community;

About Financial Commission

The Financial Commission is an external dispute resolution (EDR) organization for consumers/traders who are unable to resolve disputes with financial services providers that are members of the Financial Commission. To learn more about our requirements or to apply for membership, please contact us.

INDUSTRY ALERT: FX Group Added to Warning List

July 24, 2017: Financial Commission adds FX Group to its Warning List

 

fxgroup

 

About Warning List

The warning list is to inform the public of companies that we do not recommend to trade with, following numerous reports and complaints filed by customers regarding non-member firms concerning fraud or wrongdoing, which includes the conduct listed below:

  • Ponzi scheme, Pyramid Scheme, or a High-Yield Investment Program
  • Theft or misappropriation of funds
  • Fraudulent or unlicensed offering
  • False or misleading statements about a company
  • Other fraudulent conduct

INDUSTRY ALERT: Finance Trade Group Added to Warning List

July 24, 2017: Financial Commission adds Finance Trade Group to its Warning List

 

Finance Trade Group

About Warning List

The warning list is to inform the public of companies that we do not recommend to trade with, following numerous reports and complaints filed by customers regarding non-member firms concerning fraud or wrongdoing, which includes the conduct listed below:

  • Ponzi scheme, Pyramid Scheme, or a High-Yield Investment Program
  • Theft or misappropriation of funds
  • Fraudulent or unlicensed offering
  • False or misleading statements about a company
  • Other fraudulent conduct

VerifyMyTrade – Because Every Trader Should Know!

If you are trading in the forex market, then you are probably wondering how well your broker is executing your orders. And if you’re not wondering this, then maybe now is the time to start being inquisitive.

Unfortunately, brokers do not provide their clients with tools that confirm the execution quality of orders. This doesn’t necessarily mean that traders are given poor performance, but it does not confirm the opposite either.

In a decentralized market such as Forex, there is no single price available for everyone, and the quotes of market makers may differ from one another. In this regard, the average trader does not have the opportunity to assess the quality of execution, except to independently analyze the prices of different brokers at every point in time. Without the correct technology, this is a time consuming and difficult task.

But now there is just such a tool! Introducing VerifyMyTrade, an independent data repository that provides post-trade analysis of order execution for Forex transactions.

As expected, after the launch of the service the developers received a lot of feedback, both positive and negative. Many financial service providers agreed that this tool creates the ground for disagreement because it may lead traders to draw inaccurate conclusions about the quality of order execution. In fairness it must be said that this service cannot guarantee 100% accuracy of performance evaluation, but at least it provides some general indication of correctness.

At the same time, almost all those who responded supported the initiative because it really seeks to shed light on the process of pricing in the forex market. I absolutely agree with all the arguments and I want to explain why. Let’s introduce an example of two mobile users in one city. The first pays $ 100 per month and the second only $ 80. Many people might think that the first one overpays. However, can one make a comparative assessment without a detailed estimate of the quantity and duration of calls, as well as other options available in the contract? No, this simply isn’t impossible. In this respect the Forex market is no different; without understanding at what moment a trader concludes deals and what volumes, it is impossible to accurately assess the quality of performance. However, we all understand that in any market there is always a realistic price range within which the purchase of goods or services should not cause any surprise to the consumer.

From the above example I suggest looking at VerifyMyTrade from the perspective of what the service is trying to achieve: Firstly, to determine whether the price received from your dealer is out of range when compared to prices received from other dealers. Secondly, to show how competitive the pricing was in comparison with the prices of other market participants – a factor that is dependent on many factors; as shown in the cell phone example above.

Let’s have a look at the real problem faced by dealers and traders every day. In the overwhelming majority of cases, traders only recheck the execution price of loss-making trades. When one makes a loss, it is human psychology dictates one to go and check whose fault it was. We are convinced that there was an error, and that somebody else was at fault!

 

What does the trader do in this situation?

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As a rule, he looks at the price of execution of his trade, and then looks for a dealer whose price at the time of execution was more beneficial to the executed trade. The problem is that within the structure of a decentralized market, the probability of finding a more beneficial price is very high, and on this basis the trader submits a claim to the dealer.

 

What does the dealer do in this case?

no The dealer reminds the trader of the decentralized nature of the forex market, highlights the legal terms and conditions according to which the dealer has the final say in determining the market price! That is it, the dealer does not even want to enter into a dialogue about the availability of a better price somewhere else

 

Problem – Conflict of interest

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From this moment on the disagreements begin. Only an independent third party such as the Financial Commission is capable of judging such cases. Despite signed the legal documents, the trader sees only loopholes and biases and considers himself deceived. He no longer wants to listen to any arguments of the dealer and believes that the contract is structured in such a way as to give the dealer absolute legal power for all occasions.

 

Solving the problem at the stage of its occurrence

Verify My Trade An educated trader is a loyal customer. VerifyMyTrade gives traders an understanding of what a decentralized market is before he independently comes to some conclusions and lodges a claim. By providing traders with a tool for analyzing the quality of their own traders, the dealer declares transparency and commitment to honest business. The client will then learn that price execution does not exist only as “correct” or “incorrect”, but with many varying options and factors in between. As a consequence, even if an execution problem is found the client will look at this as an error rather than as malicious intent.

 

Position of the Financial Commission

finCom_150 The mission of our organization is to create a more honest and reliable environment in the Forex market. This mission is realized by bringing together brokers who are committed to observing the highest standards of commercial honor and best business practices, as well as the promoting the growth of trader knowledge about the inner workings of the Forex market. VerifyMyTrade is an excellent initiative designed to increase the transparency of the industry and the level of awareness of traders – making it a perfect fit with the mission of our organization.

Financial Commission Appoints Alexey Sidorov to its Dispute Resolution Committee (DRC)

July 6, 2017: Financial Commission, a leading External Dispute Resolution (EDR) organization, operated by FinaCom PLC, servicing online Forex and CFD brokerages and technology providers within the financial services industry, today announces the appointment of Alexey Sidorov to its Dispute Resolution Committee (DRC).

Enhancing the DRC structure

Alexey Sidorov

Alexey Sidorov is the latest industry expert to join the Financial Commission’s DRC – which consists of a diverse panel of industry professionals, who follow a non-bias protocol to process and resolve complaints from our members’ clients.

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.

 

Peter Tatarnnikov, Financial Commission Chairman, said “We are extremely pleased to welcome Alexey Sidorov to the Financial Commission’s Dispute Resolution Committee. Alexey is a proven leader who has held several top level positions for governmental regulatory institutions in key roles relevant to forex regulations, and also brings valuable experience from in the banking sector as an economist.”

About Alexey Sidorov

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.

Alexey studied at the Belarussian State Economic University in the Faculty of Banking with a specialization in finance and credit, from 1997 to 2002, prior to embarking on his career in finance.

About ARFIN

ARFIN (the Financial Market Development Association of Belarus) is a non-profit, membership based association of brokerage organizations operating on Forex market. ARFIN’s main goal is to develop effective regulatory measures for the Belorussian financial markets and to work out a set of management standards for the industry as well as norms to protect the interests of private investors.

About Financial Commission

The Financial Commission is an external dispute resolution (EDR) organization for consumers/traders who are unable to resolve disputes with financial services providers that are members of the Financial Commission. To learn more about our requirements or to apply for membership, please contact us.