France’s financial ombudsman rejects investor complaint over Euronext orders annulment

Maria Nikolova

A trader who placed two buy orders at a price 100 times inferior to the average for the securities in question has had his orders annulled by Euronext, with the trader’s complaint rejected by the AMF Ombudsman.

In special cases, Exchanges do have the right to annul orders that have been executed, with one such case being presented to France’s AMF Ombudsman – Marielle Cohen-Branche. Today, Ms Marielle Cohen-Branche said it had to reject the complaint by an investor over his/her orders’ annulment by Euronext, as she found that the Exchange had the right to do so.

The particular case concerns events from May 3, 2017, when an investor whose name is presented as M.D for confidentiality purposes placed two orders at a price of EUR0.03. The transactions were partially executed at this price the same day. Later on the same day, however, the investor found that the orders were annulled.

The financial intermediary whose services M.D has used has explained that Euronext has annulled the orders. M.D has turned to the AMF Ombudsman to appeal the Euronext actions and to reinstate the validity of the transactions.

In examining the case, Ms Cohen-Branche reviewed Euronext’s explanation and saw that the cause for the annulment was “Unrepresentative price”, that is, “aberrant rate”. The Ombudsman examined the average price for the securities in question and found that it was around EUR 3 during the day before and the days that followed. This means that the price at which the orders were executed (EUR 0.03) was 100 times lower than the average.

The pricing for the same instrument indicated by a liquidity provider approached by the Ombudsman was also around EUR 3.

The Ombudsman noted that Euronext’s rules that are available on the website of the Exchange specify the right of the Exchange to annul orders, including ones that are executed, in certain circumstances, such as “unrepresentative price”.

Ms Cohen-Branche has informed the investor that she cannot support the complaint, as the orders were annulled in line with the market rules. She admitted that such situations may be very discouraging for investors but emphasized that the rules exist to maintain the market stability and credibility.

The AMF Ombudsman can be involved in any dispute that is within the jurisdiction of AMF, the French financial markets regulator. This includes: financial product marketing, asset management, transmission and reception of stock market orders, account keeping services for a securities account, personal equity plans, etc.

Read this next

Institutional FX

Euronext reports double-digit growth in FX volume

Pan-European exchange, Euronext has reported a 10 percent rebound in the average daily volume on its spot foreign exchange market. The ADV figure stood at $19.6 billion in January 2022, which is up from December’s $18 billion.

Digital Assets

Voyager subpoenas FTX’s inner circle over Alameda loan

Bankrupt crypto broker Voyager Digital, represented by law firm Kirkland & Ellis, is seeking court approval to subpoena Sam Bankman-Fried’s inner circle, as well as Alameda Research’s former executives.

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

<