The decision on this complaint is based on the information provided by the brokerage company XXX  and Mr. XXX

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it is necessary to note the fact that the incident on the Client’s trading account occurred during a thin market period, at the beginning of the Asian trading session after the weekend. The client should be aware that during this period there is often a significant decrease in liquidity in the market. In turn, this circumstance radically changes the flow of quotes, leading to a sharp widening of spreads and the formation of price gaps. The Client must be aware that conducting trading operations in such market conditions is accompanied by significant risks.

2. Secondly, it should be noted that Stop orders, which also include an order of the Buy Stop/Sell Stop type, inherently do not guarantee the execution of client orders exactly at the price specified in them. Depending on the market situation, such orders can be executed either exactly at the price specified in them, or at a price worse than specified. A pending Stop order becomes active as soon as at least one quote in the stream of prices broadcast by the broker reaches the price value specified by the client.

If we reveal in detail the logic of executing a Stop order on the real market, it will look like this: when the market reaches the price specified in the client’s order, the system submits a Market order at any price available on the market (in the market depth) for a given volume. In this case, execution will occur according to the queue of current positions registered on the Broker’s server.

3. Thirdly, according to the trading conditions specified in the corresponding section on the Broker’s website, as well as in the Broker’s regulatory documents (see clauses 2.1, 2.4 c) of the Regulations for trading operations for Standard Market MT4 accounts), the Client’s trading account has a floating spread , as well as Stop Out at 20%. Opening a trading account of the specified type by the Client means the latter’s consent to accept the trading conditions offered by the Broker. In this regard, it should be noted that according to the information provided by the Broker, during the period of the incident, the margin level on the Client’s trading account dropped below critical (1.56%), and therefore, the Broker forcibly liquidated the Client’s unprofitable positions ## 50743483, 50900194, 51427174, 52024537 . This fact is confirmed by the trading server log records, as well as the history of tick data for the financial instrument EURAUD, provided by the Broker. The Broker’s actions during the incident fully comply with the provisions of clauses 7.1-7.2 of the Regulations:

7.1 The Company has the right to forcefully close the Client’s open positions without consent and any prior notice if the “Equity”/“Funds” ratio on the trading account falls below the Stop out level. The Stop out level is indicated on the Company’s website in the “Trade conditions” section.

7.2 The margin level is controlled by the server, which, if condition 7.1 is met, generates an order to forcefully close all positions on instruments during their trading session without prior notice. Stop out is executed at the market price in the order of the general queue with the Clients’ orders. The Client agrees that the execution price may differ from the quote at which the Stop out order was generated. Forced closing of a position is accompanied by a corresponding entry in the server log file with the comment “Stop out or so”.

4. Fourthly, regarding the Broker’s obligation to warn the Client about the need to replenish the balance of the trading account due to a drop in the margin level on his trading account, which the Client also mentions in the text of his complaint. In this regard, it should be noted that, according to the provisions of the Broker’s regulatory documents:

2.34 The Client undertakes to independently monitor the level of the required margin on his trading account.

5. Fifthly, to ensure an objective investigation, the Resolution Committee requested the history of quotes for the financial instrument in the Client’s disputed positions at the time of the incident from other independent financial service providers. The Financial Commission uses several different sources such as Verify My Trade, Tradeproofer, Tradefora, TrueFX, FX Benchmark and some others to check the quality of trade execution. According to the general opinion of the Committee members, the financial result (-171745.44 RUR) obtained by the Client in the disputed transactions should be canceled by the Broker. The Committee members came to this conclusion after comparing the Broker’s quotes offered to the Client with quotes obtained from other reliable sources. During the period of the incident, quotes for the financial instrument EURAUD in the Broker’s quote stream differed significantly from quotes received from other independent financial service providers, and thus did not reflect the real situation on the market.

6. Finally, it should also be noted that when making a decision on this claim, the members of the Committee took into account the following circumstances:

a) The Client did not use pending Stop Loss orders to limit potential financial losses on disputed positions ## 50743483, 50900194, 51427174, 52024537, and was thus prepared to lose the entire deposit under certain circumstances.

b) a few hours after the incident, the price of the EURAUD financial instrument reached the level at which Stop Out on the Client’s trading account should have been triggered.

c) the Client’s pending Take Profit orders were not and could not be executed until now, since the price of the EURAUD financial instrument did not reach the appropriate levels.

Taking into account the above, as well as the documentary evidence provided by the Broker, the Committee experts came to a consensus that the Broker’s liquidation of the Client’s unprofitable positions ## 50743483, 50900194, 51427174, 52024537 was incorrect. In connection with this circumstance, the members of the Committee proposed a compromise solution to the parties to the dispute: to restore positions ## 50743483, 50900194, 51427174, 52024537, provided that the Client is ready to deposit additional funds into the trading account # XXX necessary to maintain these positions (taking into account the level Stop Out 20%, as well as the price dynamics of the EURAUD financial instrument that took place after the incident).

If the Client is ready to restore the disputed positions, and within three days from the date of this decision fulfills the conditions named by the Committee, the disputed positions must be restored by the Broker.

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

Head of DRC

The decision on this complaint is based on the information provided by the brokerage company XXX  and Mr. XXX

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that according to the information provided by the Broker:

a) The Client’s orders for MT5 account # XXX were executed at the next available prices provided by the Broker’s Liquidity Providers. The Broker indicates that slippage can be positive or negative depending on factors like available liquidity, order type and volume.

b) The Broker’s execution model of Limit and Stop orders assumes activation only after a trigger price indicated in the order is hit. When the price of the asset reaches the trigger price, a Market order is sent. A Market order will be executed at the current market price. The reason for this is to avoid clients’ order rejections due to not available liquidity at a certain price.

с) In the Broker’s opinion, Market execution ensures that clients can trade under live streaming and best executable prices with immediate confirmations by the interbank market where Buy and Sell orders are matched up.

d) The execution prices came directly from the LPs and no wrongdoing is recorded anywhere from outside, as confirmed by the FIX log records. The Company is dependent on 3rd parties which it has no control over.

2. Second, in order to make an objective decision on this case the DRC has analyzed the trading activity in the Client’s account # XXX. 

a) The general analysis of the transactions performed by the Client showed the following:

• The Client’s trades were carried out in the period from 10.10.2022 to 06.09.2023.
• The Client’s trades were made with the financial instruments of the FX market (major and cross-currency pairs).
• The volume of the trades performed by the Client ranged from 0.01 lots to 1.3 lots.
• The duration of the Client’s trades ranged from several minutes to several hours.
• Most of the Client’s trades were carried out during the hours of inactive market (immediately after the Rollover).
• Most of the Client’s trades were opened via Buy Limit/Sell Limit orders.

b) The analysis of the financial results of transactions performed by the Client showed the following:

• After 870 transactions the Client made a net profit in the amount of 10 USD.
• The share of profitable trades performed on the Client’s account was 607 or 69.77%.
• The share of unprofitable trades performed on the Client’s account was 263 or 30.23%.

с) The analysis of the execution quality of the trades provided by the Client for the investigation, which included 373 trades, showed the following:

• The share of trades opened with negative slippage was 56 or 15.01%.
• The share of trades opened with zero slippage was 77 or 20.64%.
• The share of trades opened with positive slippage was 240 or 64.34%.

3. Third, the DRC has also verified the validity of the Broker’s allegation regarding the Client’s abusive trading strategy aimed at finding the vulnerabilities of their technical equipment and software for profit. For this purpose, the DRC has examined the documentary evidence provided by the Broker, as well as the history of price data on the financial instruments in the disputed transactions, obtained from independent providers of financial services. To ensure an objective investigation Financial Commission uses several various sources, such as Tradeproofer, Tradefora, Verify My Trade, TrueFX, FX Benchmark and some others to verify the execution quality of trades. The analysis of the execution quality of the profitable transactions made by the Client in the period before July 24, 2023, showed that at least a part of them were opened and/or closed at prices much better than actual market prices available in the period of the incident (above the average or/and awesome execution).

4. Fourth, based on the analysis of the history of the Client’s trading operations and the FIX log records provided by the Broker, it can be concluded that the Client indeed might have used special technical means (EA) exploiting inefficiencies in the Broker’s quotation system: on the daily basis, in the period immediately after the Rollover the Client placed pending Buy Limit/Sell Limit orders with Take Profit and Stop Loss orders attached to them (If Done type orders), on multiple financial instruments. The Client’s trading strategy is based on making profits from the sporadic market fluctuations that occur in the period of illiquid market, at the expense of the favorable execution (zero slippage or positive slippage) of Limit Orders at the Broker. In this regard it should also be noted that according to the Broker, the Company does not apply any filters on its pricing as they believe that pricing should always reflect market conditions.

5. Fifth, the DRC members expressed their common opinion regarding the fact that, by its definition, a Buy Limit/Sell Limit order (including Take Profit orders) assumes execution at the requested price or at the best price at the time of order execution. Using this type of order, a trader understands and expects that their trade order given to a broker will be guaranteed to be executed at a price not worse than they requested. The Financial Commission also follows this approach, as this is an example of Fair Business Practice widely recognized throughout the financial services industry. So, in the general opinion of the DRC members, negative slippage for Limit orders for retail client is unacceptable, because it is against the definition of the Limit order. Buy Limit/Sell Limit orders (including Take Profit orders) should be placed on the market as Limit orders, and then at low market liquidity they will simply not be executed but will remain in the system in the waiting mode until market conditions allow their execution.

6. Finally, from the technical point of view, MT4/MT5 platform allows to execute Limit orders with any slippage. Depending on the bridge software, brokers could execute Limit orders on LPs as actual Limit orders, execute them as Market orders on LPs after triggering of Limit price in MetaTrader, not to mention B-booking them with/or without slippage.

Thus, on one hand the DRC members agreed that the Broker has sufficient grounds to claim that the Client indeed used special technical means (EA) exploiting inefficiencies in the Broker’s quoting system.

In this regard, the experts of the DRC expressed a common opinion on the organization of the process of trading low-liquid financial instruments during a period of low market activity: if a broker cannot provide a normal supply of prices, they should prohibit trading or look for another source of quotations. Currently, there are many companies offering high-quality Market Data that can be used without any risk to business. The experts of the DRC believe that the Broker should bear the risks associated with the quality of the quotations supplied.

On the other hand, the experts of the DRC expressed a common opinion that the Broker must adhere to the principles of Fair Business Practice, which in this particular case assumes the following: if the Broker does not have the technical ability to place Buy Limit/Sell Limit orders (including Take Profit orders) as Limit orders on the LP side, then they must either prohibit clients from using orders of this type on their platform (so as not to mislead the clients), either update the technical part of their infrastructure to place such orders as Limit, or accept the risk that they will have to cover negative slippage when executing pending orders from clients from their own funds. 

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

Head of DRC

The decision on this complaint is based on the information provided by the brokerage company XXX and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First, according to the Broker, prior to the incident, the Client identified a technical problem on the Broker’s side and implemented an abusive strategy aimed at making risk-free profits at the expense of lagging / non-market Moreover, the Broker points out that the Client coordinated his trading operations with other clients, the holders of trading accounts ## 1272956, 1279873, which is also a violation of the trading rules established by the Company. This fact is confirmed by the same CID registered in the server log records on the relevant accounts.

2. Second, it should be noted that in order to make a decision on this case the DRC has analyzed the Client’s trading activity in his trading account # XXX

a) The analysis of the nature of the transactions performed by the Client showed the following:

• The Client’s transactions were made in the period from 05.2023 to 27.07.2023.
• The Client’s transactions were made with one financial instrument: XAUUSD.
• The size of the Client’s transactions varied from 01 to 4.48 lots.
• The duration of the Client’s transactions ranged from several minutes to several hours.
• The transactions performed on the Client’s account were made during the hours of active market

b) The analysis of the financial results of transactions performed by the Client showed the following:

• After 307 transactions performed in the specified period, the amount of net profits accumulated on the Client’s trading account reached 19905.52 EUR.
• The share of profitable transactions performed by the Client was 48% or 244.
• The share of unprofitable transactions performed by the Client was 52% or 63.
• The number of SO events that occurred on the Client’s account in the specified period was 2.

3. Third, the DRC has verified the validity of the Broker’s assertion regarding the Client’s use of the vulnerabilities of their technical equipment and software for profit. For this purpose, the DRC has examined the documentary evidence provided by the Broker, as well as the history of price data on the financial instruments in the disputed transactions, obtained from independent providers of financial services.

To ensure an objective investigation Financial Commission uses several different sources, such as Tradeproofer, Tradefora, Verify My Trade, TrueFX, FX Benchmark and some others to verify the quality of trades’ execution. The analysis of the execution quality of the Client’s trades showed that a significant part of the large-size trades (0.5 lots or more) performed in the period between 28.06.2023 and 27.07.2023 were opened and/or closed at prices that were much better than the actual market prices available in the period of the incident.

A good example of the above-mentioned abusive strategy utilized by the Client can be a series consisting of 4 consecutive profitable transactions with the financial instrument XAUUSD performed on the Client’s account on June 29, 2023.

As such, in the common opinion of the DRC members, the Broker have sufficient grounds to assert that at least a part of transactions performed on the Client’s trading account # 1279859 were executed at lagging / non-market prices. It is highly likely that the Client might have used special technical means (EA) to exploit vulnerabilities in the Broker’s quotation system.

4. On the other hand, the experts of the DRC also expressed a common opinion on the organization of the process of trading at the Broker. The experts of the DRC believe that if a broker cannot provide a normal supply of quotes, they should prohibit trading or look for another source of quotes. Currently, there are many companies offering high-quality market data that can be used without any risk to business. According to the experts of the DRC, the Broker should bear the risks associated with the quality of the quotations supplied.

5. Furthermore, it should also be noted that in its decisions, the Financial Commission tries to adhere to the principles of Fair Business Practices, which imply, among other things, the following: if any problem is detected, its solution should be provided as soon as possible to mitigate the negative impact of this problem on the client. The Financial Commission adheres to the following rule: if the client has unfairly made a profit (using the vulnerabilities of the platform), then such profit must be recognized as illegitimate within 1-5 business days and debited from the client’s trading account. The client must be notified of the violation in a timely manner, and not after several weeks or months, at the stage of withdrawing funds from the client’s trading account.

6. Finally, it should also be noted, that in the opinion of the DRC, the collaboration claim made by the Broker cannot be accepted in this case, since the Broker failed to identify and flag the customers based on their common digital traits, specifically by the same CID registered in the server log records on the relevant accounts.

Thus, taking into account all of the above, the members of the DRC have decided:

1. Not to recognize the transactions disputed by the Broker as legitimate;
2. Consider the cancellation of the financial results of the disputed transactions by the Broker as lawful;
3. Hold the Broker liable for the following points:

a) The Company must bear the proper but limited responsibility for the occurrence of technical problems in its trading system and belated reaction in their elimination

b) The Company must be duly responsible for the untimely notification of the Client about the revealed violations of its trading rules

с) The Company should formulate more clearly the provisions of regulatory documents concerning the abuse of such kind. As an example, the following wording could be recommended:

You consent that the Company reserves the right to immediately terminate your access to the trading platform(s) or Account(s) or refuse or cancel any order, in the event you voluntarily and/or involuntarily partake in arbitrage unrelated to market inefficiencies, including but not limited to, latency arbitrage and swap arbitrage and/or contrary to good faith; under such circumstances, the Company may at its discretion, close any of your Account(s) and recover any losses incurred from such practices.

Based on the above, the members of the DRC of the Financial Commission have decided that the Client should be compensated in the amount of 50% of the disputed amount. Also, according to the general opinion of the DRC members, the Broker should take the necessary measures for the timely detection of such technical problems and their elimination in the future.

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

Head of DRC

The decision on this complaint is based on the information provided by the brokerage company and the Client.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that the incident on the Client’s trading account occurred at the very beginning of the Asian trading session after the weekend. The Client should be aware that the market very often experiences a significant decrease in liquidity during this period. In turn, this circumstance radically changes the flow of quotes, leading to a sharp widening of spreads and the formation of price gaps. The Client should be aware that trading operations in such market conditions involve significant risks. In addition, the geopolitical tensions in the Middle East region that occurred over the weekend (source), caused a significant increase in the market volatility of the financial instrument XAUUSD at the time of the incident.

2. Second, the Client should take into account that even 100% locking on trading accounts with a floating spread is impossible, due to the absence of a fixed difference between the Buy and Sell prices. In the case of position locking (which was the case in this case), spread widening automatically reduces the unrealized positive financial result on profitable positions, while increasing the unrealized negative financial result on unprofitable positions. In some market situations, spread widening can lead to undesirable consequences, such as Stop Out.

3. Third, according to the information received from the Broker (formal letter from the Broker’s Liquidity Provider regarding the abnormal market conditions in the period of the incident), in the period from December 3rd 23:15:00 UTC to December 3rd 23:58:00 UTC due to the immense volatility in the market of the financial instrument XAUUSD during that period, liquidity was limited, leading to high spreads, as most liquidity providers halting pricing altogether. The apex of the low liquidity and higher spreads regime was between the times December 3rd 23:27:00 UTC to December 3rd 23:40:00. After 23:40 prices were normalized and providers that halted pricing for those 13 minutes, have resumed their pricing.

4. Fourth, the trading terms on the Client’s account suggest a floating spread and a Stop Out at the 40% level. This information is clearly defined on the Broker’s website. By opening a trading account of the selected type, the Client agreed to accept the trading terms provided by the Company. In this regard, it should be noted that according to the information provided by the Broker, at the time of the incident, the spread in the financial instrument XAUUSD had widened significantly. As a result, the Equity/Margin ratio on the Client’s account fell below the critical level (40%). As such, due to insufficient margin, the disputed positions ## 49586486, 49596596, 49596622, 46155870, 48886713, 49259052, 49664998, 49674113, 48886673, 49021139, 49044482, 49175857, 49175865, 49258891, 49693280, 49664695, 49664989, 49693254, 49699199, 49610305, 49696990, 49697606 were liquidated by the Broker. This fact is confirmed by the server log records, provided by the Broker. In the period of the incident, the Broker acted in full compliance with the provisions of their regulatory documents:

14.2. The Client shall pay the Initial Margin and/or Hedged Margin at the moment of opening a position. The amount of Initial Margin and Hedged Margin for each Instrument is defined in the Contract Specifications.

…

14.6. XXXXXX is entitled to close the Client’s Open Positions without the consent of the Client or any prior Written Notice if the Equity is less than a certain rate depending on the account type as stipulated on the Website.

5. Finally, to ensure an objective investigation of the case the DRC requested historical price data on the financial instruments in the disputed transactions from other independent providers of financial services. Financial Commission uses several different sources, such as Tradeproofer, Tradefora, Verify My Trade, TrueFX, FX Benchmark and some others to verify the quality of trades’ execution. A comparison of the Broker’s quotes offered to the Client with the quotes from independent sources confirmed the fact that in the period of the incident the quotes on the financial instruments in the Client’s portfolio, published by the Broker reflected the actual situation on the market.

Summarizing all the above and taking into account the abnormal market conditions during the incident, the experts of the DRC have made their decision in favour of the Broker. In the general opinion of the DRC members, at the time of the incident, the Broker acted in full compliance with the provisions of its regulatory documents and the trading rules established by the Company. The experts of the DRC found the execution of the disputed orders correct and legitimate since the quotes on the financial instruments published by the Broker were consistent with acceptable market prices. Accordingly, the claim of the Client for compensation of losses in the amount of 16661.72 USD was found by the members of the Committee as having no grounds.

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

Head of DRC

The decision on this complaint is based on the information provided by the brokerage company XXXXX and Mr. XXXXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that according to the information received from the Broker:

a) On 13.11.2023 at 01:30:19 a non-market quote from one of the liquidity providers (1920.96) entered the price flow for the financial instrument XAUUSD.

b) As a result of the pricing incident the Client’s positions ## 30202517, 30350840, 30542914, 30851355, 30887570, 30905531 were forcibly closed by Stop Out.

с) The Broker has credited the Client’s account with the compensation in the amount of 1314.40 The fact of compensation is confirmed by 1 balance sheet transaction # 28694941.

d) The amount of compensation was calculated by the Broker as the difference between the actual closing price (1920.96) of the disputed Long positions ## 30202517, 30542914, 30851355, 30905531 and the actual market price (1937.39) available at the moment of the Stop Out event, that occurred at 01:30:19 (server time).

In support of their position the Broker referred to the following provisions of the Regulations on trading operations for MT5 accounts:

9.21 In the event of a spike (error quote) – when a non-market quote enters the quotes flow (a non-market quote means the following: a price in the trading platform that does not correspond to the market price at a given period of time; there is a significant price gap; the price returns to its initial position within a short period with a price gap being formed; the absence of extreme price fluctuations preceding the formation of this quotation; the absence of significant macroeconomic events and/or high-impact corporate news at the time of its occurrence), the Company shall be liable for any losses incurred as a result of trading operations performed at this non-market quote, ie the Client will be fully reimbursed for the loss received due to a non-market quote. The profit received from a non- market quote will be fully deducted from the Client’s trading account.

2. Second, with regard to the unrealized profits on the disputed positions established with the financial instrument XAUUSD, which the Client claims were missed due to the pricing error on the Broker’s side, the following should be noted:

a) According to the documentary evidence provided by the Broker (full trading statement, server log records), the Client did not attach any pending Take Profit / Stop Loss orders to the disputed positions ## 30542914, In other words, the Client did not in any way indicate his intentions with respect to the relevant positions.

b) The same is true for the liquidated positions ## 30350840, 30887570 established with the financial instrument Nasdaq100.

с) At the same time the disputed positions ## 30202517, 30851355 established with the financial instrument XAUUSD were supposed to be closed with profits at the price levels of 2011.62 and 25 indicated by the Client in the relevant Take Profit orders attached to said positions.

d) Thus, in the absence of the pricing error in the Broker’s platform, the Client’s positions ## 30202517, 30851355 would have been closed with profits in a few days after the incident, as the price of the financial instrument XAUUSD had reached its all-time high, but the rest of the disputed positions with no TP and SL orders attached to them (i.e. positions ## 30542914, 30905531, 30350840, 30887570) would have continued to generate profits/losses.

3. Third, to ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transactions from other independent providers of financial Financial Commission uses several different sources, such as Tradeproofer, Tradefora, Verify My Trade, TrueFX, FX Benchmark and some others for the purpose of verification of the quality of trades’ execution. The comparison of the Broker’s quotes offered to the Client with the quotes received from independent sources confirmed the fact that at the time of the incident (13.11.2023, at 01:30:19, server time) the Bid quote (1937.39) for the financial instrument XAUUSD, used by the Broker to calculate the amount of compensation, reflected the actual situation on the market.

4. Finally, it should be noted that the members of the DRC took into account the following circumstances in reaching their decision on this complaint:

a) The members of the DRC admitted that the pricing error in the Broker’s platform disrupted the Client’s trading plans and that this event had a negative impact on the Client’s psychological state.

b) Considering the above, it should be noted that the Financial Commission is committed to the best business practices accepted throughout the industry, which assumes that if there is any problem caused by the broker, there should be minimum impact on the Client, and some solutions should be provided in a quick manner to mitigate negative effects of it on the Client’s positions.

c) The Broker partially compensated the Client for unrealized profits and losses that could have been avoided due to the system failure. Thus, in the general opinion of DRC experts, the Broker acted correctly, but the amount of compensation offered to the Client was not considered appropriate.

Summarizing all the above the Dispute Resolution Committee has ruled in favor of the Client. Considering the circumstances of the case, as well as the documentary evidence provided by both parties of the dispute, the experts of the DRC have found the actions of the Broker in the period of the incident as correct and legitimate. At the same time, the experts of the DRC have decided that the Client should be paid additional compensation in the amount of unrealized profits for the disputed orders ## 30202517, 30851355, taking into account the Client’s intentions in relation to the said orders, as well as the price dynamics of the financial instrument XAUUSD that occurred after the incident.

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

Head of DRC

The decision on this complaint is based on the information provided by the brokerage company XXXXX and Ms. XXXXXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that, based on the information from the documents received from the Broker (full trading statement, server log), the chronology of events in the period of the incident developed as follows:

a)  At the end of the trading day on Friday, November 10, 2023, the amount of Equity on the Client’s trading account was 1557.66 SGD. This fact is confirmed by the history of trading operations performed on the Client’s account # 4329333.

b) On November 10 and 11, 2023, the Client made additional deposits in the amount of 1500 SGD, as well as the internal transfer of funds in the amount of 236.59 SGD. The fact of the relevant non-trading operations performed on the Client’s account is confirmed by 3 balance sheet transactions ## 18178672, 18180001, 18180007.

c) Thus, at the end of Sunday, November 12, 2023, the amount of Equity on the Client’s trading account should not be less than 3294.25 SGD.

d) On 13.11.2023 at 01:30:51-59 non-market quotes from one of the Broker’s liquidity providers entered the price flow for the financial instrument XAUUSD.

e) As a result of the pricing incident, the Client’s positions ## 15277912, 15291904, 15291997, 17598230, 17627465, 17651169, 17735218, 17753357, 17973560, 18009662, 18009713, 18009758, 18009759, 18009893, 18076189, 18105997, 18106345, 18106350, 18106568, 18126509, 18130179, 18130726, 18169068, 18169284, 18176490, 18176499, 18176755, 18177970, 18178101 were forcibly closed by Stop Out.

f) On November 13, 2023, the Broker made the necessary adjustment to the Client’s account # XXX in the amount of 3251.65 SGD. The fact of the adjustment is confirmed by the balance sheet transactions ## 18186892, 18186893, 18186894, 18186896, 18186899, 18186901, 18186904, 18186907, 18186928, 18186930, 18186931, 18186933, 18186934, 18186935, 18186938, 18186943, 18186944, 18186945, 18186946, 18186992, 18187009, 18187015, 18187024, 18187025, 18187054, 18187055, 18187057, 18187074, 18187095.

g) The Broker claims that the amount of compensation was calculated based on the last valid quotes for the financial instrument XAUUSD available in the Broker’s platform before market close on Friday, November 10, 2023, e. 1938.18 / 1939.08.

2. Second, the Broker indicates that the adjustment they made based on the last valid quote 1938.18 / 08 is the fair offer they can provide to the Client:

a) Although the pricing incident did realize 70000 SGD losses, it neither increased the Client’s loss nor left the Client with less equity than what was in her account immediately before the incident

b) In addition, according to the Broker, their investigation revealed that the Client started executing short positions in XAUUSD within an hour of receiving cash adjustments to her trading account. Therefore, the Broker believes that the Client could have instead chosen to re-instate the net 0.64 lot Long position if she had a bullish view at prices that were at a similar level for at least a couple of hours after the first post-adjustment XAUUSD trade.

с) Finally, the Broker disagrees with the Client’s belief that she would have recovered all her unrealized losses if she had left the position open. The reason is that if the Client had chosen to reopen her net 64 lot Long position, it would have required the XAUUSD price to rise by around 887 dollars. However, in reality, the XAUUSD price was only averaging about 100 dollars higher, with a peak of 2132 USD registered on December 4, 2023.

In support of their position the Broker referred to the following provisions of its Client Agreement:

3. 4 ERRORS IN PRICES

Errors in pricing may occur from time to time. In these circumstances, we may adjust any element of your Position.

Our prices reflect those in the Underlying Instrument. Prices can vary quickly and in some circumstances prices that we publish may not be available for large volumes.

In addition, errors can occur, and we reserve the right to alter the price or even void the transaction. Our aim in making any adjustment to pricing will be to act fairly to you. We will not seek to take advantage of pricing errors to advantage ourselves.

 If we consider that a pricing Error has occurred, we may adjust various parameters of your Position, including potentially reversing or closing out Positions, which may mean that your profit is less than would otherwise be the case, or even that you incur a loss. However, such an adjustment will only occur when we are satisfied that a genuine pricing Error has occurred, that is, the price or value of the Position did not accurately reflect the price or value of the relevant Underlying Instrument.

3. Third, in order to ensure an objective investigation of the case, the DRC requested historical price data for the financial instrument in the disputed transactions from other independent providers of financial services. Financial Commission uses several different sources, such as Tradeproofer, Tradefora, Verify My Trade, TrueFX, FX Benchmark and some others for the purpose of verifying the quality of trades’ execution. The comparison of the Broker’s quotes offered to the Client with the quotes received from independent sources confirmed the fact that the Bid/Ask quote (1938.18/1939.08) for the financial instrument XAUUSD registered at the end of the trading day, 10.11.2023, and used by the Broker for the calculation of the amount of compensation, reflected the actual situation on the market. Also, for the purpose of calculating the potential profits/losses on the Client’s disputed positions, the DRC determined that on December 3, 2023, at 23:33:59 UTC the average Bid/Ask quotes for the financial instrument XAUUSD reached its all-time high, i.e. 2144.40/2146.70.

4. Fourth, regarding the unrealized profits on the disputed positions, which the Client claims were missed due to the pricing error on the Broker’s side, the following should be noted:

a) According to the documentary evidence provided by the Broker (full trading statement, server log records), the disputed Long positions ## 15277912, 15291904, 15291997, 17973560, 18009893, 18076189, 18105997, 18106345, 18106350, 18106568, 18126509, 18130179, 18130726, 18169068, 18169284 with pending Take Profit orders attached to them could have generated losses in the amount of (-) 2133.56 SGD after their execution (not including additional negative Swap fees since the date of the incident).

b) After the execution of the pending Take Profit orders placed by the Client (including the one attached to Long position # 15277912, at the highest price level of 75), the Client’s exposure could have been changed from Net Long 0.64 lots to Net Short 2.61 lots.

с) The Client did not attach any Take Profit orders to the disputed Long positions ## 18009662, 18009713, 18009758, In other words, the Client did not in any way indicate her intentions with respect to the relevant positions. Thus, on December 3, 2023, at 23:33:59 UTC the specified positions could have generated profits in the amount of 42550.84 SGD (not including additional negative Swap fees since the date of the incident).

d) The Client did not attach any Stop Loss orders to the disputed Short positions ## 17598230, 17627465, 17651169, 17735218, 17753357, 18176490, 18176499, 18176755, 18177970, 18178101. In other words, the Client did not in any way limit the potential losses on the relevant positions. Thus, on December 3, 2023, at 23:33:59 UTC the specified positions could have generated losses in the amount of (-) 120906.80 SGD (not including additional positive Swap fees since the date of the incident).

e) Thus, in the absence of the pricing error on the Broker’s platform, the amount of Equity on the Client’s account would have eventually decreased, and the Equity/Margin ratio would have fallen below the critical Stop-Out level.

Summarizing all the above the Dispute Resolution Committee has ruled in favor of the Broker. Considering the circumstances of the case, as well as the documentary evidence provided by the Broker, the experts of the DRC have found the actions of the Broker in the period of the incident as correct and legitimate. The Client’s suggestion that the Broker “stole her account” is a common misconception by retail traders who don’t understand that from a mark-to-market perspective unrealized losses are the same as realized losses. In the general opinion of the DRC members, the Client does not have sufficient grounds to demand additional compensation from the Broker for the unrealized profits. At the same time, the members of the DRC agreed that the compensation offered by the Broker is reasonable and appropriate in this case.

This complaint was reviewed by the members of the Dispute Resolution

Head of DRC