Membership Rules and Guidelines

//Membership Rules and Guidelines
Membership Rules and Guidelines 2017-11-22T18:36:10+00:00

[dropdown_box expand_text=”1.Introduction” start=”hide”]

1.1 FINACOM PLC LTD. (“Financial Commission”) is an independent self-regulatory organization and external dispute resolution (EDR) body. Financial Commission is not regulated by or registered with as an EDR body in any jurisdiction.

1.2 Financial Commission is a private limited company duly organized under the laws of Hong Kong. The Members of Financial Commission are individuals, firms and corporations that operate in the Financial Services Industry and who agree to be bound by Financial Commission rules.

(a) Despite the fact that FinaCom PLC Limited is registered in Hong Kong, Financial Commission does not accept any Hong Kong residents as its members. Financial Commission does not offer any services or products in Hong Kong.

1.3 The main objectives of Financial Commission are to:

(a) provide clients, at no cost, with an accessible alternative to legal proceedings to resolve their complaints against Members;

(b) act as a complaints resolution body for the Financial Services Industry; and

(c) actively facilitate the resolution of complaints with their financial service providers who are the Members of Financial Commission.

1.4 The goal of Financial Commission is to provide a prompt resolution of clients’ complaints against Members, with regard to:

(a) high commercial standards in the Financial Services Industry; and

(b) treating customers fairly in all circumstances.

1.5 Financial Commission will deal with Complaints in accordance with these Rules with the aim to resolve Complaints by:

(a) making a Ruling as to whether the Complaint falls within the jurisdiction of Financial Commission;

(b) achieving a settlement of the Complaint by the parties; or

(c) issuing an Order prescribing a particular mode of conduct to the Member against whom it receives a Complaint; or

(d) making an Award; or

(e) other appropriate remedies.

1.6 Financial Commission will not provide general information about Members, Members’ business operations or services, or the Financial Services Industry.

1.7 These Rules set out, among other things:

(a) requirements which may be applicable to its Members;

(b) who can make a Complaint to Financial Commission;

(c) what Complaints can be dealt with by Financial Commission;

(d) what Complaints Financial Commission cannot deal with;

(e) how a Complaint can be made to Financial Commission; and

(f) how Financial Commission tries to resolve a Complaint.

1.8 The Board may from time to time approve and have published on Financial Commission’s website guidelines to these Rules, procedures of Financial Commission, position statements and other documents relating Financial Commission process, however, subject to Financial Commission Rules.

1.9 In the event of a dispute as to the terms of this Membership Rules and Guidelines the English version shall prevail.

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[dropdown_box expand_text=”2. Assets and income of Financial Commission” start=”hide”]

2.1 The assets and income of Financial Commission shall be applied solely for the purpose of operating Financial Commission (including for purposes of setting up a Compensation Fund) and no portion will be distributed directly or indirectly to its Members.

2.2 Financial Commission will use some of its assets and income to set up a compensation fund, which will act as an insurance policy for the Claimants (the “Compensation Fund”). This fund will be held in a separate bank account. The Compensation Fund is financed by Financial Commission through allocation of a percentage of the monthly membership dues to it. The Compensation Fund will only cover Awards up to its current monetary compensation limit per Complainant.

2.3 Financial Commission may at any time change the amount of the current monetary compensation limit. Financial Commission will publish any change in the monetary compensation limit on Financial Commission website.

2.4 The funds from the Compensation Fund will be used by Financial Commission to satisfy an Award only if a Member refuses to adhere to a decision of Financial Commission or if a Member ceased to be a Member of Financial Commission prior to paying an Award outstanding against it.

2.5 The Compensation Fund is property of Financial Commission, no Member is entitled to any portion of the Compensation Fund for any reason including if such Member’s membership ceased.

2.6 If the Compensation Fund does not have adequate funds to cover multiple Complaints against a Member or Members, Financial Commission reserves the right to distribute the Compensation Fund as it sees fit based on the Complaints filed.

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[dropdown_box expand_text=”3. Membership” start=”hide”]

3.1 Financial Commission does not accept any Hong Kong residents as its members.

3.2 To be eligible a Member must be operating in a Financial Services Industry.

3.3 Financial Commission reserves a right to provide sub-categories of membership within the above two types of membership with different pricing, which may, among others, depend on the number of Complaints to be adjudicated in relation to such Member and other services.

Approval as a Member

3.4 To become a Member the Board must approve an organization.

3.5 To apply for approval as a Member, such organization shall:

(a) file a membership application (in the form approved by Financial Commission) identifying the type of membership being applied for;

(b) get approved by the Board; and

(c) if approved execute the membership agreement and pay Financial Commission membership fees.

3.6 Membership is not transferable. There is no limit on the number of Members.

3.7 By executing the membership agreement with Financial Commission, each Member agrees to be bound by these Rules.

Cessation of Membership

3.8 A Member may withdraw from membership in Financial Commission by giving the Chairman of the Board no less than three (3) months’ notice to that effect (“Termination Notice”). A Member may give no Termination Notice during the initial 12 month of the membership. Subject to the above, the membership shall cease upon expiry of the three (3) months’ period following the service of the Termination Notice. Any membership fees that have already been paid are non-refundable. In addition all logos and mention of Financial Commission must be removed from all marketing materials including any websites.

3.9 The Board may in their absolute sole discretion resolve, to accept a Member’s withdrawal from membership at any time even if notice has not been given in accordance with clause 3.8 and may waive any portion of the notice period.

3.10 If a Member:

(i) refuses or neglects to comply with the provisions of these Rules or with any binding decision made pursuant to these Rules; or

(ii) fails to pay any monies owing to Financial Commission within 14 days of receiving a notice requiring payment; or

(iii) ceases to be operating in the Financial Services Industry; or

(iv) for any reason ceases to be licensed or registered, as required under any applicable law in the jurisdiction in which it conducts business for operating in the Financial Services Industry; or

(v) becomes insolvent, files for bankruptcy or bankruptcy proceedings are initiated against it by its creditors;

The Board, acting in good faith and in its sole discretion, may expel that Member and any associated persons of such Member from membership with Financial Commission. If the Board passes such a resolution to expel, the Member shall cease to be a Member on the day the resolution is passed.

3.11 A Member may be expelled under clause 3.10 if:

(a) the Member concerned has been given notice of the first meeting of the Board which sets out the alleged grounds for expulsion and at which the resolution for expulsion will be considered:

(i) at least 7 days prior to the date of that meeting for reasons of non-payment of monies to Financial Commission ; or

(ii) at least 21 days prior to the date of that meeting in any other instance; and

(b) the Member has been given an opportunity to provide reasons for not expelling such Member from Financial Commission in writing.

3.12 An expelled Member may be reinstated by the Board in its absolute sole discretion and upon such terms and conditions as the Board may see fit.

3.13 Cessation of membership:

(a) does not entitle the Member to repayment in whole or in any part of any membership dues or of any other fees which have been previously paid by the Member;

(b) is without prejudice to the Member’s liability to pay any levy or other fee which has become due and payable before such cessation; and

(c) is without prejudice to the Member’s rights and obligations in respect of any Complaint commenced to be processed at Financial Commission before such cessation (including any Order, Award or any fees payable to Financial Commission in respect of such a Complaint).

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[dropdown_box expand_text=”4. Financial Requirements” start=”hide”]

4.1 Financial Commission may introduce financial requirements to all or any types of membership, such requirements will be announced by Financial Commission by publishing a notice on its website.

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[dropdown_box expand_text=”5. Reporting Requirements” start=”hide”]

5.1 Financial Commission may introduce reporting requirements to all or any types of membership, such requirements will be announced by Financial Commission by publishing a notice on its website.

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[dropdown_box expand_text=”6. Record-keeping Requirements” start=”hide”]

6.1 All Members shall comply with the record-keeping requirements set out in Annex C.

6.2 All Members shall comply with Voice Risk Disclosure Requirements set out in Annex D.

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[dropdown_box expand_text=”7. Obligation of a Member to include Financial Commission dispute resolution clause in its customer contracts” start=”hide”]

7.1 As a condition to the effectiveness of a Member’s membership, each Member shall amend the dispute resolution or any similar clause in its contracts with the customers to allow a Client to raise a Complaint with Financial Commission against such Member.

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[dropdown_box expand_text=”8. Obligation of a Member to Have a Business Continuity/Disaster Recovery Plan” start=”hide”]

8.1 Financial Commission believes that disaster recovery and business continuity issues are of utmost importance and trading technology providers must take a proactive approach to ensure that they have an adequate disaster recovery plan in place.

8.2 A disaster recovery and business continuity plan must contain the following information:

· description of backup facilities;

· procedure for implementation of disaster recovery/business continuity plan;

· disruptions of third parties;

· annual testing;

· rules of communication with Financial Commission;

· third party contact information; and

· employees and emergency contact information.

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[dropdown_box expand_text=”9. Right of the Finacial Commission to Conduct an Audit of the Member” start=”hide”]

9.1 The Financial Commission reserves a right at its own discretion to conduct an annual audit of a Member to check the Member’s compliance with these Rules, including the requirements set out in Rules 4 – 8 above.

9.2 Each Member agrees to cooperate with the Financial Commission should the Financial Commission initiate such audit, grant the Financial Commission full access to its premises and employees and promptly upon the Financial Commission’s request provide the Financial Commission with any documents and information required for the Financial Commission to conduct the audit.

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[dropdown_box expand_text=”10. Independence” start=”hide”]

10.1 The decision-making process and administration of Financial Commission are independent of its Members.

10.2 The Dispute Resolution Committee and staff of Financial Commission are:

(a) entirely responsible for the handling and determination of Complaints; and

(b) accountable only to the Board.

10.3 The Board is responsible for overseeing the operations of the Dispute Resolution Committee, for ensuring independent decision making by the Dispute Resolution Committee and staff of Financial Commission, and for preserving the independence of Financial Commission and its dispute resolution process.

10.4 In order to ensure that Financial Commission is, and is perceived to be, independent, the Board comprises:

(a) an independent Chairman; and

(b) no Member representatives on the Dispute Resolution Committee.

10.5 Notwithstanding anything the above, monetary size of the Complaint heard, Financial Commission’s Chief Operating Officer is entitled to assist the Dispute Resolution Committee in the decision making process if so requested.

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[dropdown_box expand_text=”11. Role of the Dispute Resolution Committee” start=”hide”]

11.1 Only the Board shall have authority to appoint the Dispute Resolution Committee. The Dispute Resolution Committee is the sole body who can:

(a) make any decision permitted under these Rules, including but not limited to, a review of whether a Complaint is within the jurisdiction of Financial Commission and making a Ruling on this;

(b) issue an Order; and

(c) make an Award.

11.2 The Dispute Resolution Committee shall have the powers, functions, and duties conferred by these Rules, and as conferred and delegated by the Board from time to time.

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[dropdown_box expand_text=”12. When a Complaint can be filed with Financial Commission” start=”hide”]

12.1 Financial Commission reserves a right to reject to hear any claim if the claimant resides in Hong Kong or if the claim is otherwise related to Hong Kong.

12.2 A Complaint can be filed with Financial Commission if:

(a) the Complainant is a Client;

(b) the Complaint is against a Member; and

(c) the Complainant has first tried to resolve the issue with the Member through the Member’s IDR process.

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[dropdown_box expand_text=”13. Types of Complaints covered by Financial Commission” start=”hide”]

13.1 Financial Commission will deal with a Complaint if, in relation to a Financial Service provided by a Member, such Member has:

(a) breached the terms of the contract entered into between the Member and the Complainant in relation to such Financial Service;

(b) did not meet standards of good practice in the Financial Services Industry; or

(c) acted unfairly towards the Complainant.

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[dropdown_box expand_text=”14. New grounds of Complaint” start=”hide”]

14.1 Once the Complaint is accepted by Financial Commission, the Complainant may not raise any new grounds for a Complaint unless:

(a) the Member consents to it in writing; and

(b) Financial Commission consents in writing to such terms and conditions as it regards as appropriate.

14.2 In order for a Complainant to raise any new grounds in connection with the subject matter of a previously filed Complaint, the Complainant shall withdraw his Complaint within 7 days of its acceptance by Financial Commission and file an amended Complaint with Financial Commission. Failure of a Complainant to do so will result in any additional grounds to be disregarded by Financial Commission.

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[dropdown_box expand_text=”15. Monetary compensation sought in a Complainant” start=”hide”]

15.1 Financial Commission shall deal with a Complaint if the Complainant’s loss resulting from the Member’s conduct does not exceed or appear to Financial Commission to exceed $1,000,000. For the avoidance of doubt, regardless of the compensation amount awarded by Financial Commission to the Complainant, if the Compensation Fund is used to repay the Award, such payout may not exceed Financial Commission’s current monetary compensation (as described in Rule 2.2).

15.2 The Complainant can claim compensation for losses that are:

(a) a direct financial loss, or

(b) other indirect or non-financial loss.

15.3 Punitive, exemplary or aggravated damages will not be awarded.

15.4 Financial Commission may also award interest or earnings in addition to any compensation awarded.

15.5 If interest or earnings is awarded, it will be calculated from the date of the cause of action or matter giving rise to the Complainant’s claim, but Financial Commission will have regard to any factors it considers relevant, including but not limited to, the extent to which the conduct of either party contributed to any delay.

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[dropdown_box expand_text=”16. Complaints outside of jurisdiction of Financial Commission” start=”hide”]

16.1 A reference to a Complaint shall include any aspect of the Complaint. Financial Commission will not deal with a Complaint if, at the time of receiving the Complaint or at any time during Financial Commission process, Financial Commission is satisfied that:

(a) a Complaint is about a Member’s acts or omissions that do not comprise a Financial Service;

(b) a Complaint is about someone who is not a Member at the time the Complaint is made;

(c) the Complainant is seeking compensation in an amount in excess of Financial Commission’s then current monetary compensation limit in 1000000 USD;

(d) the Complaint relates to a fee, charge, commission or, unless:

(i) the Complaint concerns the non-disclosure, misrepresentation, miscalculation or incorrect application of the fee, charge, commission

(ii) the fee, charge or commission is egregious by industry standards

(e) the Complaint is about an issue or action done or not done by, or the policies or commercial judgment of, someone other than the Member the Complainant is complaining about;

(f) the Complainant is not the person to whom the Financial Services directly relate to;

(g) the Complaint is not brought within 45 days from the moment of dispute arising between the Complainant and the Member;

(h) the Complaint has been dealt with by a court, tribunal, arbitrator or another regulated or unregulated alternative dispute resolution commissionbody, unless:

(i) the Member has declined the Complainant’s request on the execution of a default judgment; or

(ii) both the Complainant and the Member consent in writing to the Complaint being considered by Financial Commission;

(iii) it is more appropriate than the Complaint is dealt with in another forum such as a court or some other type of a judicial or arbitration tribunal.

(j) the Complainant has not undergone though the IDR procedures established by the Member; or

(k) the Complaint lacks substance or is being pursued by the Complainant for an improper purpose.

16.2 If the Complaint or any aspect of the Complaint is outside of the jurisdiction of Financial Commission, the Dispute Resolution Committee may make a Ruling that the Complaint or an aspect of it cannot be heard by Financial Commission and will advise the Complainant in writing of this setting out the reasons why the Complaint or relevant aspect of the Complaint is outside of jurisdiction of Financial Commission.

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[dropdown_box expand_text=”16 A. Right to Reject the Complaint” start=”hide”]

16 A.1 Notwithstanding anything to the contrary in these Rules, the Financial Commission has an absolute and an unrestricted right to deny any Complaint. Examples of situations when a Complaint may be denied are as follows:

– the Complainant is known to the Financial Commission or in the Financial Services Industry in general as an untrustworthy person or a person who utilizes unfair or fraudulent practices in order to obtain gain from the Members;

– the Complainant has previously abused the procedures of the Financial Commission for the purpose, which the Financial Commission finds (in its sole discretion) improper;

– the Complainant has violated any of the Rules; and

– it came to the knowledge of the Financial Commission that the Complainant engages in disparaging acts (including, but not limited to statements in public forums) in relation to the Financial Commission, its directors, members of DRC and ICC, officers and employees.

16 A.2 For the avoidance of doubt, the above examples are simply examples and the Financial Commission at its sole discretion may deny a Complaint on any other ground. The Financial Commission does not need to state the ground for denial (but may do so if it chooses so) when informing the Complainant that his/her Complaint was rejected.

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[dropdown_box expand_text=”17. Complaint at no cost to Complainant” start=”hide”]

17.1 The Member must not charge the Complainant any fee in connection with a Complaint made to Financial Commission.

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[dropdown_box expand_text=”18. Principles Financial Commission shall have regard to” start=”hide”]

18.1 In dealing with a Complaint at any stage of Financial Commission process, Financial Commission will observe procedural fairness and shall regard:

(a) good practice in the Financial Services Industry; and

(b) fairness in all the circumstances.

18.2 Dealing with a Complaint includes:

(a) deciding the extent to which a Complaint falls within the jurisdiction of Financial Commission and making a Ruling on this if it does not;

(b) assessing the merits of the Complaint;

(c) making recommendations to the Complainant and the Member about resolving it and reaching a settlement;

(d) issuing an Order; or

(e) making an Award.

18.3 When considering what constitutes good practice in the Financial Services Industry, Financial Commission may:

(a) consult within the representatives of Financial Services Industry;

(b) seek, but is not bound by, advice from such persons whom Financial Commission regards as suitably qualified to give such advice.

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[dropdown_box expand_text=”19. Internal Dispute Resolution (“IDR”)” start=”hide”]

19.1 Every Member must have IDR procedures in place which comply with standards and requirements of Financial Commission and are approved by Financial Commission. Prior to adoption of such IDR procedures, a Member shall submit to Financial Commission’s review a draft of such procedures and adequately address any comments or recommendations received from Financial Commission.

19.2 After recording a Complaint as received, Financial Commission will only continue to deal with the Complaint if the Complainant has first tried to resolve the Complaint with the Member using the Member’s IDR process, unless:

(a) Financial Commission considers that the Complaint or any aspect of the Complaint should be dealt with urgently; or

(b) it does not appear that the Complaint or an aspect of the Complaint is being addressed adequately or in a timely manner by the Member; or

(c) Financial Commission reasonably considers that it is appropriate in certain circumstances not to require the Complainant to first try to resolve the Complaint or an aspect of the Complaint with the Member.

19.3 A Complainant may make a Complaint to Financial Commission if:

(a) the Member does not give the Complainant a final response through its IDR within 14 days of receipt of the Complaint; or

(b) the Member otherwise gives a final response that the Complainant does not consider resolving his Complaint.

19.4 A Member must inform a Complainant of Financial Commission’s contact details and his right to refer his Complaint to Financial Commission:

(a) when the Member gives the Complainant a final response as a result of the IDR procedures within 14 days of receipt of the Complaint; or

(b) when the Member becomes aware that it will not be able to give a final response within the above mentioned time frame;

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[dropdown_box expand_text=”20. Making a Complaint” start=”hide”]

20.1 A Complainant may make a Complaint to Financial Commission only in writing by completing the complaint form which can be found at Financial Commission’s website (www.financialcommission.org).

20.2 The Complainant can make a Complaint about two or more Members in relation to the same subject matter, but must generally first of all try to resolve his Complaint with each of the Members concerned. These Rules apply with any necessary modifications in respect of a Complaint against two or more Members in relation to the same subject matter.

20.3 When making a Complaint, a Complainant shall:

(a) describe the nature of the dispute with the Member in reasonable detail, inform of the outcome of the IDR procedures with the Member and specify the compensation or corrective action he is seeking from the Member to resolve the Complaint;

(b) provide Financial Commission with copies of supporting documentation and every document relevant to the Complaint; and

(c) consent in writing (which can be done by clearly stating so in the Complaint) to Financial Commission providing a copy of the Complaint and supporting documentation to the relevant Member.

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[dropdown_box expand_text=”21. The Dispute Resolution Committee Process” start=”hide”]

21.1 Without in any way limiting what Financial Commission can do, the Dispute Resolution Committee can at any time and from time to time during Financial Commission process do all or any of the following things:

(a) ask any party questions about the Complaint;

(b) require any party promptly to provide to, or procure for, the Dispute Resolution Committee any information and documents that the Dispute Resolution Committee considers necessary within a certain time, except where the party satisfies the Dispute Resolution Committee that:

(i) provision of information would breach a duty of confidentiality to a third party and, despite best endeavors, the third party’s consent to the disclosure of the information has not been able to be obtained;

(ii) provision of information would breach a court order or prejudice a current investigation by the police or other law enforcement agency; or

Failure to submit such documents or information and in the absence of a reasonable explanation, allows the Dispute Resolution Committee to reserve the right to draw such inferences as it considers appropriate.

(c) ask any party for their comments generally on the other party’s responses to Financial Commission;

(d) send to one party copies of:

(i) the other party’s comments on the Complaint;

(ii) the other party’s answers to questions asked; and

(iii) information provided to the Dispute Resolution Committee by the other party;

(e) at the expense of the Member, obtain such specialist advice as Financial Commission reasonably considers is desirable or necessary to deal with the Complaint.

21.2 The Dispute Resolution Committee is not bound by any legal rule of evidence and may inform itself about the Complaint and all matters relating to it in whichever manner and by whichever means, in its sole discretion, it shall deem appropriate.

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[dropdown_box expand_text=”22. Investigation Phase” start=”hide”]

22.1 At the first stage of the dispute resolution process Financial Commission will conduct investigation into the merits of the Complaint. During the Investigation Phase, Financial Commission may carry out whatever re conciliation and investigation process it thinks appropriate to deal with the Complaint, including conducting oral conferences with the parties, requesting any additional documents, obtaining advice from experts.

22.2 If Financial Commission requires additional documents from the Member or the Client, both are required to respond to Financial Commission within 7 days or a reasonable explanation must be given as to why more time is needed.

22.3 If there is no response given within 7 days Financial Commission will proceed in the decision making process with the information it has on file. A lack of response from the Member or the client could affect the outcome of the decision of the dispute.

22.4 Financial Commission may carry investigation process until Financial Commission is reasonably satisfied that it is in possession of all relevant information regarding the merits of the Complaint.

22.5 Having completed its investigation, Financial Commission may:

(a) give the Complainant and the Member Financial Commission’s assessment of the merits of the Complaint; and/or

(b) make a recommendation to the Complainant and the Member about resolving the Complaint.

22.6 If no settlement of the Complaint is achieved between the parties during the Investigation Phase, Financial Commission may declare this phase completed and proceed to the Determination Phase.

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[dropdown_box expand_text=”23. The Determination Phase” start=”hide”]

23.1 At the Determination Phase, the Dispute Resolution Committee will decide on the merits of the Complaint.

23.2 The Dispute Resolution Committee will generally decide on the merits of the Complaint based upon:

(a) the Complaint;

(b) the Member’s response;

(c) the Complainant’s reply; and

(d) information and documents Financial Commission has received during Financial Commission process, including any advice from suitably qualified people.

23.3 The Dispute Resolution Committee may decide as follows:

(a) make an Award to the Complainant that the Member shall pay the Complainant compensation for any loss the Complainant has suffered up to the monetary compensation limit; and/or

(b) issue an Order that the Member do some act or refrain from doing some act in relation to the subject matter of the Complaint; or

(c) deny the Complaint, refuse the Complainant any remedy and declare the Complaint closed.

23.4 The Dispute Resolution Committee’s decision will be in writing and will include the Dispute Resolution Committee’s reasons underlying the decision.

23.5 If the Dispute Resolution Committee makes an Award, the amount of compensation will be determined by what the Dispute Resolution Committee believes is sufficient but not more than is required to compensate the Complainant for its loss as a result of the act or omission of the Member.

23.6 If the Dispute Resolution Committee issues an Order, in considering whether the Order should require the Member to do or refrain from doing some act, the Dispute Resolution Committee will have regard to what is fair and reasonable to put the Complainant and the Member in the position the Complainant and the Member would have been in were it not for the act or omission of the Member.

23.7 In doing this, the Dispute Resolution Committee will consider what is fair and reasonable for all parties, including someone who is not a party to the Complaint but who might be affected by the Dispute Resolution Committee’s decision.

23.8 The Dispute Resolution Committee’s decision will be binding on a Complainant only if he accepts such decision in writing within 14 days of the receipt of the written decision from the Dispute Resolution Committee. If the Complainant accepts the decision, the Complainant must provide the Member (if the Member so requests) with a binding release of the Member from liability in respect of the matters resolved by the decision. The release must be for the full value of the claim which was the subject of the Complaint, even if the amount of the claim exceeds the amount of the remedy decided upon by Financial Commission. The Dispute Resolution Committee’s decision becomes binding on a Member only if the Complainant accepts that decision in full and final settlement of his Complaint against the Member (and executes the necessary release, if requested by the Member).

23.9 If the Member requests that the Complainant should provide a release to such Member, the Member shall within 7 days of the receipt of the Dispute Resolution Committee’s decision make a written request of such release and provide both Financial Commission and the Complainant with the text of such release. The release shall have the effect and only the effect of releasing the Member from any further legal liability to the Complainant and precluding commencement of legal proceedings by the Complainant against the Member in relation to the subject matter of the Complaint on condition that the Member has fully complied with the determination. Financial Commission reserves a right to review and amend the text of the release as it reasonably deems appropriate in order for the release not to negate the effect of any decision made by the Dispute Resolution Committee.

23.10 If the Dispute Resolution Committee does not receive the Complainant’s signed acceptance of its decision and a signed release (if requested so by the Member) within 14 days after the receipt of Dispute Resolution Committee’s decision, the Dispute Resolution Committee may declare the Complaint closed.

23.11 Whenever the Dispute Resolution Committee makes an Award or issues an Order, the Member must comply with it fully and within the time period specified in such Award or Order. If the Dispute Resolution Committee’s Award or Order does not specify a particular time period, then the Member must comply with the Award or Order as soon as practicable.

23.12 Financial Commission may publish a non-identifying copy of the Dispute Resolution Committee’s determination of the Complaint on Financial Commission’s website, unless either party requested in writing that a decision be made on a confidential basis and not subject to public disclosure.

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[dropdown_box expand_text=”24. Settlement” start=”hide”]

24.1 At any time and from time to time during Financial Commission process, if it thinks it appropriate to do so, Financial Commission may:

(a) refer the Complaint back to the Member and afford it another opportunity to reconsider its position given Financial Commission’s preliminary view of the merits of the Complaint;

(b) facilitate informal negotiations between the parties to resolve the Complaint or any aspect of the Complaint; or

(c) suggest that the Complaint be settled or withdrawn, with or without conditions, with the agreement of both parties in full and final settlement of the Complaint.

24.2 If parties reach a settlement, they shall provide Financial Commission with a copy of the executed settlement agreement so that Financial Commission could declare the Complaint closed.

24.3 If Financial Commission is satisfied that:

(a) the settlement agreement was validly signed and executed by all the parties

(b) the Complaint was within Financial Commission’s jurisdiction; and

(c) the Member has failed to comply with the settlement agreement,

The Dispute Resolution Committee may make an Award on terms of the settlement agreement to enforce it.

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[dropdown_box expand_text=”25. Recommendation on reasonable offer” start=”hide”]

25.1 Where Financial Commission reasonably considers that an offer made by a Member to a Complainant to resolve a Complaint is reasonable having regard to the information before Financial Commission may recommend to the Complainant that he shall accept the Member’s offer in full and final settlement of the Complaint.

25.2 If the Complainant does not accept the offer, Financial Commission may close the Complaint in the absence of further information from the Complainant that would justify the Complaint remaining open. If Financial Commission closes the Complaint, it will notify the Complainant and Member that it has done so.

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[dropdown_box expand_text=”26. Non-compliance with a Financial Commission requirement” start=”hide”]

26.1 If either party does not comply with a Financial Commission requirement within the period specified by Financial Commission:

(a) Financial Commission may give the party whatever further period Financial Commission thinks appropriate to comply;

(b) if the Member still does not comply:

(i) the Dispute Resolution Committee may, if it considers appropriate, proceed to determine the Complaint on the basis of the information and documents then available; or

(ii) Financial Commission may expel the Member as a member of Financial Commission;

(c) If the Complainant still does not comply, Financial Commission may declare the Complaint closed or, where Financial Commission requirement only relates to a particular aspect of the Complaint, Financial Commission may decline to consider that aspect further and continue to deal with the other aspects of the Complaint.

26.2 For the purpose the expression “Financial Commission requirement” refers to any requirement imposed by Financial Commission or these Rules on the Complainant or the Member, including the requirement to respond to Financial Commission within a certain time or the requirement to provide Financial Commission with such information and documents that may be requested by Financial Commission in relation to the Complaint.

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[dropdown_box expand_text=”27. Enforcing an Award” start=”hide”]

27.1 If a Member fails to comply with an Award or Order of the Dispute Resolution Committee within the time frame specified in such Award or Order (or if no time specified, as soon as practicable), Financial Commission may give the Member 28 days’ written notice to comply with such Award or Order. If the Member still fails to comply, then Financial Commission can take whatever action it deems necessary to enforce the Award or Order, including but not limited to:

(a) take action to suspend or cancel the Member’s membership of Financial Commission;

(b) bring legal proceedings for specific performance of the Member’s agreement to abide by Financial Commission’s Rules, including but not limited to the Member’s obligation to comply with the Award or Order; or

(c) take such other action as Financial Commission thinks appropriate to secure compliance with the Member’s obligations under Financial Commission’s Rules

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[dropdown_box expand_text=”28. Objection Notice from Member” start=”hide”]

28.1 Financial Commission will suspend dealing with a Complaint if during the Investigation Phase the Member gives an Objection Notice to Financial Commission and is able to demonstrate to Financial Commission’s reasonable satisfaction:

(a) that the Complaint involves or may involve an issue which could have important consequences for the Member’s business or the Financial Services Industry generally; or

(b) that the Complaint raises an important or novel point of law.

28.2 A Member who gives an Objection Notice must:

(a) identify and describe the issues which could have important consequences for the Member’s business or the Financial Services Industry generally as the issues relate to the Complaint; or

(b) identify and describe the important or novel point of law as it relates to the issues raised in the Complaint; and

(c) advise Financial Commission of the grounds on which the Member seeks a declaration from the court or any other judicial or arbitration tribunal and how the declaration being sought relates to the issues raised in the Complaint.

28.3 Financial Commission will refuse to accept an Objection Notice if:

(a) the Member has not complied with these Rules;

(b) Financial Commission reasonably considers that the Member has inadequate grounds for seeking a declaration from court or any other judicial or arbitration tribunal;

(c) having regard to all other relevant circumstances, Financial Commission is reasonably satisfied that the Member has given Financial Commission the Objection Notice for an improper purpose; or

(d) the Member previously gave Financial Commission an Objection Notice in relation to the same Complaint, in which case, Financial Commission will give the Member written notice of the refusal and will continue to deal with the Complaint.

28.4 If the Member does not commence judicial or arbitration proceedings on the issues specified in the Objection Notice within 14 days of giving the Objection Notice to Financial Commission, then Financial Commission will deal with the Complaint as if the Objection Notice had not been given.

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[dropdown_box expand_text=”29. Joining other parties” start=”hide”]

29.1 If Financial Commission believes that:

(a) it would not unfairly prejudice the Complainant or the Member; and

(b) it would lead to a more efficient and effective resolution of the Complaint, Financial Commission ma y allow or require another Member (called the “Third Party Member”) to be joined as a party to the Complaint.

29.2 Financial Commission may impose terms and conditions on joining a Third Party Member. For example, Financial Commission may require the Member the Complainant has complained about to pay costs or to provide security for future costs.

29.3 Once a Third Party Member has been joined in the Complaint, Financial Commission may give directions about how the Complaint will be dealt with.

29.4 A Third Party Member has all the rights and duties under these Rules as if that Third Party Member were the Member as referred to in the Rules.

29.5 Where a Third Party Member has been joined, these Rules are to be read to include that Third Party Member with appropriate changes being made.

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[dropdown_box expand_text=”30. Legal or other representation” start=”hide”]

30.1 Neither party is required to have legal or other representation (“representation”) while Financial Commission deals with the Complaint.

30.2 If a party chooses to be legally or otherwise represented, this will be at its own cost.

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[dropdown_box expand_text=”31. Statements and information made ‘without prejudice’” start=”hide”]

31.1 All statements the Complainant or Member makes and information or documents they provide to Financial Commission are made on a “without prejudice” basis. This shall mean that anything said or done or information provided to Financial Commission during Financial Commission process cannot be used in subsequent legal proceedings unless required by an appropriate court process.

31.2 Any information obtained by Financial Commission during Financial Commission process may not be disclosed by:

(a) the Complainant;

(b) the Member; or

(c) Financial Commission,

to anyone else unless disclosure is required by law or required or permitted by Financial Commission’s Rules.

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[dropdown_box expand_text=”32. Confidentiality” start=”hide”]

32.1 Any party to a Complaint who believes that disclosure of any information or document to Financial Commission will place them in breach of a duty of confidentiality they owe to someone else shall notify Financial Commission. The party claiming confidentiality shall use its best endeavors to obtain the consent of the person to whom the duty is owed to disclose the information or document. If the consent is not received within a reasonable time, then the party claiming confidentiality will not be required to comply with any direction from Financial Commission that the information or document be provided.

32.2 If Financial Commission receives any information or document from any party to a Complaint with a request from that party that it be treated confidentially, Financial Commission will not disclose that information or document to any other party or to any other person except:

(a) with the consent of the person supplying the information or document, or

(b) as required by law or required or permitted by these Rules or Financial Commission’s Rules.

32.3 Financial Commission will not use or rely on any confidential information or document provided by one party to make a finding adverse to any other party, unless it:

(a) reasonably considers that the information or document is genuine and credible; and

(b) informs any party against whom an adverse finding may be made that it is in receipt of the confidential information or document; and

(c) identifies the confidential information or document to any party against whom an adverse finding may be made; and

(d) If appropriate, summarizes the confidential information or the relevant contents of the document to any party against whom an adverse finding may be made.

32.4 Before Financial Commission ends any confidential information or document to another forum, Financial Commission will obtain in writing the consent of the party claiming confidentiality.

32.5 Except where these Rules, or the law prohibits it, Financial Commission may at its discretion disclose the Complaint, the Member’s response, the Complainant’s reply and any information or document obtained by Financial Commission during Financial Commission process to the Board, Dispute Resolution Committee, any Financial Commission employee, consultant, contractor or agent to the extent that is appropriate to do so to enable the person to fully and effectively carry out their powers, functions or duties.

32.6 Financial Commission will not be obliged to make available to the parties any memorandum, analysis, file notes or an y other documents generated by Financial Commission’s employees, consultants, contractors or agents.

32.7 Notwithstanding anything set forth in these Rules, any party to a Complaint who receives from Financial Commission any document prepared by Financial Commission or provided to Financial Commission by another party:

(a) must use that document only for the purpose of dispute resolution in accordance with and as contemplated by Financial Commission Rules; and

(b) must not, except as required by law or legal proceedings, disclose the document to any other person without the prior written consent of Financial Commission, which consent may be subject to such conditions as Financial Commission may in its absolute discretion consider appropriate, and for the purposes of this Rule “disclose” includes communicating or divulging by any means or in any form whether written, electronic or oral or otherwise, including copying by any means and in any form the whole or any part of the document.

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[dropdown_box expand_text=”33. Exemptions from these Rules” start=”hide”]

33.1 Financial Commission may of its own volition or on the application of a party at any time and from time to time at its discretion and on whatever conditions it sees fit to impose, exempt a party from any one or more of these Rules. Before Financial Commission grants any exemption, it must satisfy itself that doing so:

(a) is necessary to ensure the efficient and effective resolution of the Complaint; and

(b) would not be otherwise prejudicial or unfair to or impose an unreasonable burden or disadvantage on any party.

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[dropdown_box expand_text=”34. Extensions of time” start=”hide”]

34.1 Financial Commission may of its own volition or on the application of a party at its discretion and on whatever conditions it sees fit to impose extend any time for compliance with any matter under these Rules. Before Financial Commission grants any extension of time, it must satisfy itself that doing so would not be unfair to or impose an unreasonable burden or disadvantage on any party.

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[dropdown_box expand_text=”35. Declaring a Complaint closed” start=”hide”]

35.1 Financial Commission may at any time declare a Complaint closed in any of the following cases:

(a) the Complaint is or becomes outside of Financial Commission’s jurisdiction;

(b) the Complaint is withdrawn, settled or resolved; or

(c) Financial Commission deems the Complaint withdrawn by reason of the Complainant’s failure to respond to Financial Commission’s communications within the period specified by Financial Commission; or

(d) the Complainant does not accept the Member’s offer which Financial Commission considers reasonable having regard to the information before Financial Commission and recommends the Complainant to accept (in the absence of further information from the Complainant that would justify the Complaint remaining open);

(e) the Complainant does not accept Financial Commission’s determination of the Complaint;

(f) Financial Commission is not satisfied that the Complaint is properly presented by the Complainant; or

(g) Financial Commission is unable to locate the Member despite its reasonable efforts to do so.

(h) Financial Commission learns of any ground listed in Rule 16A.1.

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[dropdown_box expand_text=”36. Previous Financial Commission decisions” start=”hide”]

36.1 Financial Commission will not be bound by any previous Financial Commission decisions, but will endeavor to be consistent in its decision-making.

36.2 A previous Financial Commission decision includes but is not limited to a Ruling, Order or an Award

36.3 If Financial Commission deems it appropriate, Financial Commission will send the Complainant and the Member a copy of or extract from a Financial Commission policy that Financial Commission thinks is relevant to their Complaint.

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[dropdown_box expand_text=”37. Exceptions to Financial Commission decisions being final and binding” start=”hide”]

37.1 Every Financial Commission decision is final and binding on a Member. Neither the Complainant nor the Member may file any appeals, and as such the Financial Commission’s decision is non- appealable. A Member may not challenge an Order or an Award in a court or other judicial or arbitration tribunal unless there is new information that can be presented that would affect the outcome of the Complaint.

37.2 Financial Commission decision may only be reviewed or reopened in the circumstances allowed in these Rules or Financial Commission guidelines.

37.3 Financial Commission decision is only binding on a Complainant if the Complainant accepts it. If the Complainant does not accept a Financial Commission decision, the Complainant is at liberty to pursue other remedies in relation to the subject matter of the Complaint in a courts or any other judicial or arbitration forum, but not with the Financial Commission. If the Complainant does this, Financial Commission can declare the Complaint closed and no Financial Commission decision will have any force or effect against the Member in relation to the Complaint.

37.4 If upon the Dispute Resolution Committee’s own motion or upon application by a party within 28 days after the date on which an Order or Award was sent to that party, the Dispute Resolution Committee has determined that in relation to that Order or Award:

(a) a clerical mistake was made; or

(b) there was an accidental error or omission; or

(c) there is a material miscalculation of figures or a material mistake in the description of any person, thing or matter; or

(d) there is a defect in form; or

(e) the terms of the Order or Award do not reflect the Dispute Resolution Committee’s actual intentions,

The Dispute Resolution Committee may:

(i) make whatever amendments to the Order or Award it thinks appropriate; or

(ii) re-issue the Order or Award; or

(iii) give such directions as it thinks appropriate (including directions about times for compliance) in connection with the Order or Award.

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[dropdown_box expand_text=”38. Member ceasing to carry on business” start=”hide”]

38.1 Financial Commission may in its discretion:

(a) by-pass the Member’s IDR process, whether or not the Member has commenced considering the Complaint within that process; and

(b) deal with or continue to deal with a Complaint, if the Member:

(i) ceases to carry on its business; or

(ii) ceases to hold a relevant license; or

(iii) becomes insolvent, files for bankruptcy or in relation to which bankruptcy or liquidation proceedings are initiated,

and in doing so, Financial Commission must consider the Complainant’s interests.

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[dropdown_box expand_text=”39. Publicizing Financial Commission” start=”hide”]

39.1 The Board and all Members must ensure that Financial Commission is appropriately and effectively publicized.

39.2 Financial Commission’s logo and mark shall only be permitted for use and distribution for Members in good standing. The use of Financial Commission logo or mark is strictly forbidden unless authorized by Financial Commission.

39.3 Unless the contrary is expressly indicated by the Financial Commission in its Award or Order (as applicable), neither the Complainant nor the Member may publicize, share, transfer to any person or otherwise distribute any or part of Order, Award, any correspondence between the Financial Commission and the Complainant or the Member or any information which was disclosed by any person during the Complaint resolution process. If the Complainant or the Member violate this provision of the Rules, the Financial Commission may annul any of its Orders or Awards made in relation to any Complaint filed by such Complainant or against such Member, as the case may be.

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[dropdown_box expand_text=”40. Indemnity from liability” start=”hide”]

40.1 To the extent permitted by law, Financial Commission excludes all liability to Members arising out of or in connection with these Rules and the performance by Financial Commission of functions contemplated hereunder. This exclusion applies, without limitation, to all liability in contract or tort for actions or omissions of Financial Commission, the Board, the Dispute Resolution Committee, its owners and their officers, employees, agents, and contractors, and any related persons and entities (the “Indemnified Persons”).

40.2 The Members agree to indemnify the Indemnified Persons from and against all expenses, losses, costs and damages (including any reasonable legal fees and expenses), direct, consequential, and/or incidental in nature, that the Indemnified Persons may incur as a result of (i) any breach of these Rules by the Member, its employees, contractors, or agents or (ii) any claim, demand, proceeding, suit and action by any third party for anything done or omitted in the discharge or purported discharge by the Indemnified Persons of their rights and obligations under these Rules.

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[dropdown_box expand_text=”41. Protection from defamation” start=”hide”]

41.1 The Member must not instigate defamation action of any kind against a Complainant or Financial Commission in respect of allegations made to Financial Commission by the Complainant about the Member.

41.2 Any criticism of a Financial Commission decision in a public forum or on a Member’s website is prohibited and could result in dismissal from Financial Commission.

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[dropdown_box expand_text=”42. Service of notices” start=”hide”]

42.1 Financial Commission may give a document, demand, notice or other communication (“notice”) to any party:

(a) personally;

(b) by sending it by post, to the address of a party that it has on file; or

(c) by sending it to a fax number or e-mail address of a party that it has on file.

Post

42.2 A document sent by post must be sent by a courier mail, and shall be deemed to have been received on the day of its delivery to the relevant address.

Fax or e-mail

42.3 If a document is sent by fax or e-mail, delivery of the document is deemed to occur on the next day following the of such fax or email transmission.

Evidence of service

42.4 A certificate in writing signed by a director or officer of Financial Commission stating that a document was sent to a party by post or by fax or email on a particular date is prima facie evidence that the document was so sent on that date.

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[dropdown_box expand_text=”43. Defined terms” start=”hide”]

43.1 Certain words and phrases have the special meanings set out below:

“Award” shall mean the binding determination made by the Dispute Resolution Committee which may award any compensation to the Complainant;

“Board” shall mean the board of directors of Financial Commission;

“Complainant” shall mean a Client who makes a Complaint to Financial Commission about a Member or Members, but does not include a person who is a member of Financial Commission unless the person did not, at the time the event complained about occurred, have a business relationship with the Member against whom the Complaint is made;

“Complaint” shall mean:

(a) for the purpose of IDR, an expression of dissatisfaction made to a Member, related to its conduct, products or services, or the complaints handling process itself, where a response or resolution is explicitly or implicitly expected; and

(b) for the purpose of EDR, an expression of dissatisfaction made to Financial Commission, related to a Member’s conduct, products or services, whether or not the Complainant has first tried to resolve the Complaint with the Member using the Member’s IDR process;

“Client” shall mean an individual (whether acting as a trustee or otherwise), a partnership comprising individuals or a small business, but does not include an individual that Financial Commission determines is not a client for the purposes of Rules or guidelines because of the assets, wealth, or both, that the person has, holds or controls;

“Financial Commission’s website” or “website” shall mean the website maintained by Financial Commission at www.financialcommission.org;

“Financial Commission process” shall mean the process for dealing with a Complaint under these Rules;

“Determination Phase” shall mean the phase during which the Dispute Resolution Committee makes a decision on the merits of the Complaint and, as required, makes an Award or issues and Order;

“EDR” shall have the meaning given thereto in Rule 1.1;

“Financial Service” shall mean either services and/or products within the scope of the financial trading including but not limited to Forex, Options, Commodities, Equities, or Binary Options;

“Financial Services Provider” shall mean any individual or organization that offers, for compensation, Financial Services;

“Financial Services Industry” shall mean a collection of Financial Service Providers;

“IDR” shall mean internal dispute resolution involving a procedure adopted by a Member to consider a Complaint;

“Investigation Phase” shall mean the investigation phase of Financial Commission process;

“Member” shall mean a person, firm or corporation which is a member of Financial Commission;

“Monetary compensation limit” shall mean an amount not exceeding $20,000, as may be amended from time to time; Note: Separate claims by the same Complainant will not be aggregated for the purpose of determining a maximum monetary compensation limit;

“Order” shall mean a determination made by the Dispute Resolution Committee prescribing certain mode of conduct to a Member;

“Rules” shall mean these Rules;

“Ruling” shall mean a Ruling by the Dispute Resolution Committee as to whether a Complaint or any aspect of a Complaint can be dealt with under these Rules or about any matter that arises in the course of Financial Commission dealing with the Complaint;

43.2 Unless the context suggests otherwise:

(a) the singular includes the plural and vice versa;

(b) any reference to a party to a Complaint includes that party’s executors, administrators or permitted assigns;

(c) a reference to one gender includes every gender;

(d) headings are for reference purposes only; and

(e) references to any applicable law including but not limited to any regulations and other rules made under it and to consolidations, re-enactments, amendments or replacements of it.

43.3 In calculating compliance with a time period by reference to a number of “days”, shall include weekends but not include any global public holiday or public holiday pertaining to the country of residence of the Member.

43.4 Whenever these Rules refer to information, they shall include information or evidence in any form and from any source, but do not include information or evidence that has been or appears to be illegally obtained.

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[dropdown_box expand_text=” Annex A Financial Requirements” start=”hide”]

“Reserved”

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[dropdown_box expand_text=”Annex B Reporting Requirements” start=”hide”]

“Reserved”

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[dropdown_box expand_text=” Annex C Record-Keeping Requirements” start=”hide”]

1. General Standard

Members who handle orders must adopt and enforce written procedures reasonably designed to record and maintain essential information regarding customer orders and account activity.

2. Transaction Records

Electronic trading systems should record the following information for each transaction:

  • buy or sell;
  • date and time the order is received by the system;
  • price (or premium for an option) at which the order is placed;
  • price (or premium for an option) quoted on the trading platform when the order was placed (if the system is a trading platform);
  • account identification;
  • currency pair;
  • size;
  • type of order (if not a straight market order);
  • date and time the execution information is reported by the system;
  • date and time the order is transmitted to the trading platform; and
  • date and time of execution.

For options, the system should record the following additional information:

  • put or call;
  • strike price; and
  • expiration date.

All times information must be recorded to the nearest second. The system must also record any other necessary information (e.g., re-quotes, that the platform did not execute the order because the customer had insufficient equity in its account). If the transaction is not subject to daily rollovers, the system must also record the expiration date of the transaction, if any.

The system should record this same information for liquidating orders. If customers place them as liquidating orders, the system should identify them as liquidating orders. If they are generated by the system because there is insufficient equity in the account, the system should record that information. If customers enter them as new orders, however, they need not be identified as liquidating orders in the order information even if they result in offset.

Electronic trading platforms should record the following information for rollovers:

  • account identification;
  • currency pair;
  • size;
  • long or short;
  • date and time of the rollover;
  • price of the position after the rollover;
  • bid and ask prices quoted on the platform when the rollover occurred; and
  • any other fees charged for the rollover.

An electronic trading platform should be programmed to provide the amount of interest credited or debited to the account, if any. The trading platform should also be programmed to provide a report, upon request, showing the following information for all transactions other than rollovers executed on that day: time, price (or premium), quantity, long or short, currency pair, account identification, and, for options, strike price, put or call, and expiration date.

3. Account Records

Electronic trading platforms should create and maintain daily records containing the following information:

  • account balance (funds in the account plus or minus open trade equity);
  • account identification;
  • funds in the account (net of any commissions and fees); and
  • open trade equity (the net profits and losses on open trades).

 

For open option positions, the account balance should be adjusted for the net option value and the daily record should include the following additional information:

  • if the system treats the rollover as two transactions, it should provide the date and time of each transaction;
  • long option value;
  • short option value; and
  • net option value.

4. Time and Price Records

Electronic trading platforms should create daily logs showing each price change on the platform, the time of the change to the nearest second, and the trading volume at that time and price. Upon request by a Customer, Member should provide time and price records covering all executed transactions for the same currency pair or option during the time period in which the customer’s order was or could have been executed.

5. Profit and Loss Reports

Electronic trading platforms should be able to produce, upon request, a report showing monthly and yearly realized and unrealized profits and losses by customer. The system should generate year-end reports for each customer showing the realized profits and losses incurred during the calendar year and the unrealized profits and losses on open positions.

6. Retention

Members must maintain this information, and it must be readily accessible. These records must be open to inspection by Financial Commission, and copies must be provided to Financial Commission upon request.

7. Reviews

The Member should conduct periodic reviews designed to ensure that the electronic trading platform maintains the data and is capable of generating the reports required by this requirement.

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[dropdown_box expand_text=”Annex D Voice Risk Disclosure Requirements ” start=”hide”]

Required risk disclosures for all clients that receive investment advisory or trade advisory service (investment advice) verbally or orally (via telephone or digital voice communication) or other digital methods from another human staff, management, contractor, analyst, consultant, affiliate or IB partner of a brokerage firm that is member of the Financial Commission.  

This voice risk disclosure requirement procedure outlines steps that must be taken between a Financial Commission member and each of their clients. These disclosures will determine additional requirements to be followed by members when investment consultations are provided to a firm’s clients via (human) voice methods by any of the firm’s affiliates or agents as outlined below.

In any cases when company staff, analysts, consultants, affiliates, and/or IB partners provide any type of investment consultations via voice methods (any form of advice, opinion, recommendation, view on sentiment, etc.. ) to clients that maintain a brokerage account with a Financial Commission member firm, the following measures must be taken:

DISCLOSURE RECORD KEEPING

1. The Financial Commission member brokerage firm must obtain client’s oral acceptance of a standard trading risk disclosure outlining the relevant risks they are undertaking as well as the risk of relying on or considering investment advice;

2. The client agreement must contain a separate clause, that waves the firm’s liability for the financial outcome, regardless of the client’s actions if investment consultations are provided to the client.

AUDIO VOICE RECORD KEEPING

3. The member firm must obtain a voice recording from the customer acknowledging and accepting full risk of loss for any investments made in their trading account as a result of advice provided from the company or its agents via voice methods.

4. The Company must keep a voice recording (audio record) from its communication with each Client that contains the following four items:

  1.  Client’s full name; as reflecting on their account at the relevant Member firm;
  2.  Client’s trading account at the relevant Member firm;
  3.  Client’s acceptance and understanding of trading risks at the relevant Member firm;

RELATED COMPLAINT FILING REQUIREMENTS

If a Financial Commission member firm or their customer files a complaint with the Financial Commission, the document and audio voice records of client’s acceptance and understanding of trading risks must be provided to Financial Commission upon first request, in order to proceed through proper complaint channels.   

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