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Rules for filing a complaint against the broker to the regulator Order of filing a complaint...

What shall I do if a broker harmed me? - ForexProp

Rules for filing a complaint against the broker to the regulator

Order of filing a complaint against the broker to CySEC, FCA, ASIC, and IFSC; reasons for filing a complaint, rules for preparing a complaint to the regulators and the ombudsman
 


A regulator is the highest instance that can help sort out disputes between a trader and a broker.

True, regulators don’t examine private claims in most cases, sending traders directly to the ombudsman. However, every claim submitted can be the last drop for a broker-violator. What you are going to learn from this article:

In what cases is it reasonable to make a complaint? What is the difference between European and offshore regulators?  How to correctly submit a complaint to CySEC, FCA, ASIC, and IFSC? What are the chances to win the case?
 

How to file a complaint to the regulator against the broker

Almost every broker is licensed by this or that regulator whose jurisdiction applies to the broker’s main office. Some brokers are licensed by several regulators, but, as the past experience has shown, that’s little help for traders.

Let’s remember the most famous bankruptcies of the past years: WorldSpreads, MF Global, MMCIS, Panteon Finance - in all those cases, the regulators were powerless, yet not completely useless.
 

The traders’ mass complaints allowed preventing a total flight of capital from the brokers declared bankrupt and getting back 50% of the money. Not very much, but better than nothing.

Read on to learn in which cases you can file a complaint to the regulator, how to submit it correctly, what you can get (using the example of CySEC (Cyprus), FCA (Great Britain), ASIC (Australia), and IFSC (Belize)).
 

Complaint against a broker: reasons, goals, submission rules

First, we need to specify a few points:

  •  Any attempt to resolve a dispute with a broker should start with contacting the broker’s support service. None of the regulators will take up a claim if a trader hasn’t tried settling a dispute with the broker first. Only when the broker gives an official answer and the dispute is not resolved, the trader can make a complaint to the regulator on the basis of the previous communication with the broker;
     
  •  A complaint is made to both the regulator and the ombudsman of the broker’s jurisdiction;
     
  • The broker’s department you work with is important too. European regulators allow working only with the residents of the region, therefore offshore departments are created for Asian and other markets. If a broker is licensed by CySEC or FCA, but a trader works with a department registered in Belize or the Marshall Islands, there’s no point in filing a complaint to European regulators.
     

Theoretically, the fact of having a license shall mean that:

  • The regulator monitors thoroughly the company’s financial reports and assesses the broker’s sufficiency of capital and solvency on the basis of external audit




     
  • The regulator controls strictly the rules of segregated accounts management; the traders’ accounts are separated from the broker’s accounts. The latter can dispose only of its own funds;
     
  • Conflict of interest is excluded. In practice, traders have always disputed and will always dispute with brokers. The most frequent reason is a problem with withdrawing money. Though it can be traders’ fault in part, as they don’t read the broker’s public offer and violate the broker’s trading rules, brokers themselves may tend not to pay the money back under any pretext.
     

The cases when it’s reasonable to file a complaint against a broker:

A trader’s rights have been violated: there’s a 100% confirmation that the quotes have been manipulated, the money isn’t paid back with no reason given, the account has been blocked with violation of the public offer (agreement); indications of bankruptcy;

The broker refuses point-blank to perform its liabilities and doesn’t attempt to understand the client, persisting in its opinion. The problem hasn’t been resolved through the support service;
 

The sum of money unpaid is really big. It is logical that a complaint worth $100 will hardly be examined. However, there’s no lower limit for examining a complaint, so it’s worth making an attempt in any case.

You’d better provide for eventual communication with the regulator beforehand. Alas! A lot of traders’ complaints are declined by the Commission due to the lack of evidence, that you should collect in advance, just in case. Here are a few tips:
 

Before making a deposit, make sure that you’ve been verified and there won’t be any issues connected with verification in the future;

Keep evidence of deposits (E-wallet/card statements, screenshots of your client profile) to show that the money was really paid into the account;
 

Screenshot everything that can be useful in the future: the charts of the trading platforms, the profit you get.

Most often, a broker is not a tax agent, and therefore it is obliged to provide account statements. Request such statements from time to time. In case your account is blocked, screenshot your personal profile;
 

Keep any messages from the support service. If any dispute arises, the trader’s first step is to contact the broker’s support team.

A claim must be as concrete as possible and contain the account number, the date of the dispute, the essence of the matter, with as many numbers as possible (sums, quotes, timeframes).
 

There must be information on what happened before the problem emerged.  It’s logical that a request like “The platform isn’t working properly and the broker refused to help” will be declined.
 

1. Order of filing a complaint to CySEC

CySEC is a regulator of Cyprus chosen by many brokers operating on the territory of Europe and the CIS.
 

This jurisdiction is considered to be offshore, but CySEC operates in accordance with the MiFID directive, i.e. it acts within the European legal framework.

Attention: this regulator doesn’t examine individual claims, but all claims are considered when exercising control.
 

So, it’s worth filing an individual complaint and it will be considered, but a private dispute isn't likely to be solved. That’s why it’s better to prepare a collective claim.

Though, CySEC’s site doesn’t specify how many traders need to sign a claim so that the regulator will take action.
 

The regulator asks traders to inform it of the problem but recommends that they contact the ombudsman of Cyprus directly for sorting out disputes. A complaint form is located in the “Forms” section or can be downloaded here. Continue reading with Litefinance...
 

 

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