Hong Kong-based external dispute resolution (EDR) organization Financial Commission (FinaCom) saw in 2016 an increase of 80% in the number of complaints it received. Investors filed 165 complaints last year. In comparison, the EDR received 93 complaints in 2015.
Investors sought compensation of a record-high more than $1.8 million, but the paid amount was $157,326. The maximim compensation awarded to a single investors was $57,199 and the minimum one was $10.
“This nearly 80% increase was driven from the addition of new members reflecting the increasing credibility and positive reputation Financial Commission has been earning since its foundation, and coupled with market volatility from major geopolitical events during the year,” the FinaCom said.
Of the total number of complaints 128 (or 77.6%) were filed against FinaCom members and the remaining 37 (or 22.4%) were against non-members. In the cases involving FinaCom members, in 39 (or 30.5%) instances the resolutions were in favour of the client and in 61 (or 47.7%) – in favour of the broker. Some 28 (or 24.9%) of the cases were out of the commission’s jurisdiction.
The FinaCom received last year 56 financial complaints (54 against members), 57 trading complaints (54 against members), and 52 non-trading complaints (36 against members).
During 2016, the EDR added 18 new members, ending the year with a total of 33 members. Among its members are Alpari, Amarkets, Grand Capital RoboForex, Mtrading, Olymp Trade, Forex Club, FXOpen, among others.
“On the backdrop of challenging market conditions, Financial Commission was well positioned to handle a significant increase in the number of complaints together with the addition of new members, as factors such as trading volumes and volatility ranged from low to high surrounding major events throughout 2016 and which led to considerable changes in asset values for active and passive market participants,” the EDR said.
FinaCom acts as a third-party mediator in case of complaints and disputes between its members and their clients in cases when the involved parties cannot solve themselves. The organization helps facilitate a simpler, swifter resolution process than through typical regulatory channels.
Its members are forex and binary option brokers, as well as independent service providers (ISPs). The EDR organization has two membership categories, depending on the amount of compensation to which investors are entitled. Clients of A-category member get up to to $20,000 and those of B-category members receive a compensation of up to $5,000.