Monthly Archives: February 2021

Last year, in April 2020, Admiral Markets changed the terms for trading financial instruments without notice to traders. This happened when the prices of crude oil fell significantly. At the start of the Covid-19 pandemic, due to the events going on around the world, the price of crude oil fell so much that its price was negative.

To avoid complications, Admiral Markets decided to change the trading conditions, however, no prior statement was made by the broker prior to the decision. In addition, Admiral Markets has also increased commissions to keep positions open overnight.

Due to the steps taken by the broker, the Financial Control Authority decided to “punish” the broker by forcing him to pay a fine of 32,000 euros. According to representatives of the regulatory agency, the decision was made because the reasons for the decision were not disclosed to traders in a timely manner.

Admiral Markets is a well-known Forex broker, which offers its services to European traders.

The decision of the regulatory agency

While the action taken by the regulator to somehow punish the broker for not considering the interests of traders is fair, the amount of the fine is not. basically nothing for a company like Admiral Markets. Admiral Markets is a brokerage giant, the company made nearly 20 million euros in profit last year. 32,000 euros fine is nothing for such a company.

The regulator noted that the decision was made because many clients who purchased this trading asset had to restructure their positions, which was nearly impossible as the broker did not give traders any prior announcement or warning. on the measure he planned to do. .

How did the public react?

Admiral Markets’ decision was followed by a massive backlash from the public, especially the broker’s client. Many have claimed that this will cause Admiral Markets to lose its clients.

One of the users wrote that the decision was made “out of nowhere”, while another user wrote that after contacting the broker, he found out that the broker “had contracted on the contracts to term of December 2020 “.

Many others said that if the decision was announced before, many traders would not end up losing their money. On the other hand, representatives of Admiral Markets claim that they acted in the “best interests of its clients”, and the decision was made to ensure that clients would still be able to continue trading on global financial markets. However, he also noted that not all market specific circumstances were taken into account when making the decision.

It is still unclear why the company did not make any prior warnings or statements about the decision that was made. Most traders ended up finding out the actions taken by the broker only after executing the decision.

In the same month, Admiral Markets, according to the Finantsinspektsioon, significantly changed the terms and conditions of its financial instruments unilaterally and without notice, specifically the methodologies used for calculating spot prices for crude oil.

It has also increased the fees for sight deposits on the corresponding securities, reports the SNB.

The episode concerns an incident in April 2020 when changes in global financial markets caused international financial platforms to be unprepared to reflect negative prices and calculate credit limits, the SNB reports.

The Finantisinspektsioon says the change process and its basics were not transparent from a client perspective, leading clients to potentially suffer losses or miss out on gains, BNS reports.

The director of Finantsinspektsioon, Kilvar Kessler, says that a professional market player who trades complex financial instruments and offers his services to a wide circle of clients must manage and hedge against the risks and incur the corresponding costs.

A business on the ground also needs to communicate as clearly as possible with its customers when making changes, he said.

Admiral Markets could take the case to court

Admiral Markets said it could challenge the fine in court, saying it did not take into account all of the specific market circumstances.

Company CEO Sergei Bogatenkov said the company always acts in the best interests of its clients and has ensured that clients can continue to trade in global financial markets with peace of mind intact.

Bogatenkov said: “We have always been committed to ensuring that the interests of our clients around the world are protected. In this situation, we have taken steps to reduce the potential impact on our customers.

“We informed our clients very early on of any anomalies in the financial markets and asked them to be vigilant,” he continued.

The Finantskinspektsioon said that Admiral Markets had committed an offense under securities market law by failing to ensure that it was acting in the best interests of its clients at all times, and imposed a fine of € 32,000 to the company.

Admiral offers investment services for trading with Forex and Contracts for Difference (CFDs) on indices, metals, energies, stocks, bonds and digital currencies, the company says on its website.

–

Follow the ERR news on Facebook and Twitter and never miss an update!