From conflict to resolution: Financial Commission publishes broker dispute case studies

Rick Steves

The publication serves a dual purpose: educating traders about common dispute scenarios and their resolution, and helping brokers enhance their services.

The Financial Commission

The Financial Commission (FinaCom) has published several case studies from 2023, revealing key themes and outcomes in disputes between traders and financial service providers.

The external dispute resolution (EDR) entity plays a critical role in mediating issues within the trading community, ensuring fair and swift resolutions.

Illustrating FinaCom’s thorough approach to ensuring fair trade practices, the examples provide a detailed analysis of customer orders based on market conditions and pricing information from a variety of independent sources to determine the accuracy in pricing and quality in the execution of Forex, CFD (contracts for difference), and commodities trades.

FinaCom takes less than a week (on average) to resolve disputes

The various case studies reveal an increase in sophisticated strategies employed by brokers’ clients, including hedging and the use of automated tools. Despite these complexities, the Commission boasts an average dispute resolution time of 6.6 days.

The cases detailed in the publication led to the awarding of $162,406 in compensation in the illustrated instances and a total of $783,000 across all disputes in 2023.

The Dispute Resolution Committee has emphasized its focus on issues related to trading quality and execution, noting the growing interest in digital currencies and fractional equities trading. These areas have seen increased activity and interest from retail traders, pointing to evolving market trends.

The publication serves a dual purpose: educating traders about common dispute scenarios and their resolution, and helping brokers enhance their services. By sharing these case examples, the Financial Commission fosters transparency and learning within the trading community.

The Financial Commission stands as an independent EDR forum, initially established to address disputes in electronic trading markets like Forex, and subsequently expanding to cover CFDs, related derivatives, and technology platforms certification. Its role is crucial in bridging the gap between traders and financial service providers, ensuring a fair and efficient resolution process.

The EDR entity regularly updates its list of broker members, having most recently welcomed Ultima Markets to its ranks. Approved Broker Members offer stakeholders access to various benefits and services, including protection of up to €20,000 per complaint submitted.

FinaCom operates as an independent international service that helps facilitate a simpler resolution process than through typical regulatory channels, such as arbitration or local court systems. All clients of members of the Financial Commission are protected by the Compensation Fund which acts as an insurance policy. The organization also issues execution certifications for approved brokers‎ as the industry-specific association attempts to reduce the number of execution-related disputes that occur before they progress into formal complaints.

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