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Dispute Resolution Form

Effective November 18th, 2020

1.1 FINACOM PLC LTD. (“The Financials Entities”) and its affiliates, including FINACOM LTD., is an independent self-regulatory organization and external dispute resolution (EDR) body. The Financials Entities is not regulated by or registered as an EDR body in any jurisdiction.

1.2 The Financials Entities is a private limited company duly organized under the laws of Hong Kong. The Members of The Financials Entities are individuals, firms, and corporations that operate in the Financial Services Industry and who agree to be bound by The Financials Entities rules.

(a) Despite the fact that FINACOM PLC LTD. is registered in Hong Kong, The Financials Entities does not accept any Hong Kong residents as its members. The Financials Entities does not offer any services or products in Hong Kong.

1.3 The main objectives of The Financials Entities are to:

(a) Provide clients, at no cost, with an accessible alternative to legal proceedings to resolve their complaints against Members;

(b) Act as a complaints resolution body for the Financial Services Industry; and

(c) Actively facilitate the resolution of complaints with their financial service providers who are the Members of The Financials Entities.

1.4 The goal of The Financials Entities is to provide a prompt resolution of clients’ complaints against Members, with regard to:

(a) High commercial standards in the Financial Services Industry; and

(b) Treating customers fairly in all circumstances.

1.5 The Financials Entities will deal with Complaints in accordance with these Rules with the aim to resolve Complaints by:

(a) Making a Ruling as to whether the Complaint falls within the jurisdiction of The Financials Entities;

(b) Achieving a settlement of the Complaint by the parties; or

(c) Issuing an Order prescribing a particular mode of conduct to the Member against whom it receives a Complaint; or

(d) Making an Award; or

(e) Other appropriate remedies.

1.6 The Financials Entities will not provide general information about Members, Members’ business operations or services, or the Financial Services Industry.

1.7 These Rules set out, among other things:

(a) Requirements which may be applicable to its Members;

(b) Who can make a Complaint to The Financials Entities;

(c) What Complaints can be dealt with by The Financials Entities;

(d) What Complaints The Financials Entities cannot deal with;

(e) How a Complaint can be made to The Financials Entities; and

(f) How The Financials Entities tries to resolve a Complaint.

1.8 The Board may from time to time approve and have published on The Financials Entities’s website guidelines to these Rules, procedures of The Financials Entities, position statements, and other documents relating to The Financials Entities process, however, subject to The Financials Entities Rules.

1.9 In the event of a dispute as to the terms of this Membership Rules and Guidelines, the English version shall prevail.

2.1 The assets and income of the FinancialEntities shall be used solely for operating the FinancialEntities, including the establishment of a Compensation Fund. No portion of these assets and income will be distributed, directly or indirectly, to its Members.

2.2 The FinancialEntities will allocate some of its assets and income to establish a Compensation Fund, which will serve as insurance for Claimants (the “Compensation Fund”). This fund will be maintained in a separate bank account. It is financed by the FinancialEntities through a percentage allocation of the monthly membership dues. The Compensation Fund will cover Awards up to its current monetary compensation limit per Complainant.

2.3 The FinancialEntities may alter the current monetary compensation limit at any time. Any changes to the compensation limit will be published on the FinancialEntities website.

2.4 Funds from the Compensation Fund will be used by the FinancialEntities to satisfy an Award only if a Member refuses to comply with a decision of the FinancialEntities or if a Member ceases to be a Member before paying an outstanding Award.

2.5 The Compensation Fund is the property of the FinancialEntities. No Member is entitled to any portion of the Compensation Fund, even if their membership ceases.

2.6 If the Compensation Fund does not have sufficient resources to cover multiple Complaints against one or more Members, the FinancialEntities reserves the right to distribute the Compensation Fund as deemed appropriate based on the Complaints filed.

3.1 To be eligible, a Member must have been operating in the Financial Services Industry for at least 3 years.

3.2 If the applicant has been in operation for less than 3 years, the FinancialEntities requires two professional references from a shareholder, director, senior executive, or comparable officer of a Financial Services firm that has been in operation for more than 3 years.

3.3 If the applicant does not meet the requirements of Rule 3.1-3.2, the FinancialEntities, at its discretion, may apply Rule 3.4 below to approve the Member as described in the sections below.

3.4 The Financial Entities reserves the right to provide sub-categories of membership with different pricing and payment requirements, which may include considerations such as the number of Complaints to be adjudicated in relation to the Member and other services.

Approval as a Member

3.5 To become a Member, an organization must be approved by the Board.

3.6 To apply for approval as a Member, the organization shall:

  • (a) File a membership application (in the form approved by the FinancialEntities) identifying the type of membership being applied for;
  • (b) Obtain approval from the Board; and
  • (c) If approved, execute the membership agreement and pay the FinancialEntities membership fees.

3.7 Membership is not transferable. There is no limit on the number of Members.

3.8 By executing the membership agreement with the FinancialEntities, each Member agrees to be bound by these Rules.

3.9 Each Member agrees to pay membership fees in a timely manner. Payments are accepted only in Euro (€) and must be received within 10 business days of receiving a notice requiring payment to avoid late payment fees. Payments made after 10 business days of receiving notice will incur a €50 late payment fee for each business day that a payment is overdue.

Cessation of Membership

3.10 A Member may withdraw from membership in the FinancialEntities by giving the Chairman of the Board no less than three (3) months’ notice (“Termination Notice”). A Member may not give Termination Notice during the initial 12 months of membership. The membership shall cease upon the expiry of the three (3) months following the Termination Notice. Any fees already paid are non-refundable, and all logos and mentions of the FinancialEntities must be removed from marketing materials, including websites.

3.11 Any complimentary services provided by third parties and offered by the FinancialEntities to the Member will be automatically cancelled upon cessation or termination of membership. The FinancialEntities, its directors, officers, employees, or agents will not be liable for any loss arising from the use of third-party services offered through the FinancialEntities or as part of the membership, and all such liability is expressly disclaimed.

3.12 The Board may, at its sole discretion, accept a Member’s withdrawal from membership at any time, even if notice has not been given in accordance with clause 3.10, and may waive any portion of the notice period.

Grounds for Expulsion

A Member may be expelled if:

  • (i) The Member refuses or neglects to comply with these Rules or any binding decision made pursuant to these Rules;
  • (ii) The Member fails to pay any monies owed to the FinancialEntities within 10 business days of the invoice date;
  • (iii) The Member ceases to operate in the Financial Services Industry;
  • (iv) The Member ceases to be licensed or registered as required under applicable law in its jurisdiction;
  • (v) The Member becomes insolvent, files for bankruptcy, or bankruptcy proceedings are initiated against it by creditors;
  • (vi) The Member conducts business in an unfair, deceitful, fraudulent, or defamatory manner as evidenced by information from its customers, partners, or other Members of the FinancialEntities;
  • (vii) The Member’s business conduct adversely affects the reputation or business of the FinancialEntities.

The Board may expel the Member and any associated persons, with the expulsion taking effect on the day the resolution is passed.

Termination of Membership

3.13 Notwithstanding anything to the contrary, the FinancialEntities may terminate membership at any time for any reason or no reason by giving written 14 days’ prior notice to the Member and refunding the pro-rata portion of fees already paid. This is without prejudice to the FinancialEntities’s right to expel a Member, where clause 3.14 shall apply to fees already paid.

3.14 A Member may be expelled if:

  • (a) The Member has been given notice of the first Board meeting setting out the grounds for expulsion and at which the resolution will be considered:
    • (i) At least 7 days prior for non-payment of monies to the FinancialEntities; or
    • (ii) At least 7 days prior in other instances; and
  • (b) The Member has been given an opportunity to provide reasons in writing against expulsion.

3.15 An expelled Member may be reinstated by the Board at its sole discretion and on terms and conditions deemed appropriate.

3.16 Cessation of membership:

  • (a) Does not entitle the Member to repayment of any membership dues or other fees previously paid;
  • (b) Is without prejudice to the Member’s liability for any fees due before cessation;
  • (c) Is without prejudice to the Member’s rights and obligations regarding any Complaint initiated before cessation (including any Order, Award, or fees related to such a Complaint).

4.1 The FinancialEntities may introduce financial requirements for all or specific types of membership. Such requirements will be announced by the FinancialEntities through a notice published on its website.

5.1 The FinancialEntities may introduce reporting requirements for all or specific types of membership. Such requirements will be announced by the FinancialEntities through a notice published on its website.

 

6.1 All Members shall comply with the record-keeping requirements set out in Annex C.

6.2 All Members shall comply with the Voice Risk Disclosure Requirements set out in Annex D.

7.1 To ensure the effectiveness of their membership, each Member must amend the dispute resolution or any similar clause in their customer contracts. This amendment must allow Clients to raise Complaints with the FinancialEntities against the Member.

 

8.1 The FinancialEntities believes that disaster recovery and business continuity are of utmost importance. Trading technology providers must take a proactive approach to ensure they have an adequate disaster recovery plan in place.

8.2 A disaster recovery and business continuity plan must include the following information:

  • Description of backup facilities.
  • Procedure for implementing the disaster recovery/business continuity plan.
  • Handling of disruptions caused by third parties.
  • Annual testing of the plan.
  • Rules for communication with the FinancialEntities.
  • Contact information for third parties.
  • Employees and emergency contact information.

9.1 The FinancialEntities reserves the right, at its discretion, to conduct an annual audit of a Member to verify compliance with these Rules, including the requirements set out in Rules 4 – 8.

9.2 Each Member agrees to cooperate with the FinancialEntities if an audit is initiated. This includes granting the FinancialEntities full access to its premises and employees and promptly providing any documents and information required for the audit.

10.1 The decision-making process and administration of The Financials Entities are independent of its Members.

10.2 The Dispute Resolution Committee and staff of The Financials Entities are:

(a) Entirely responsible for the handling and determination of Complaints; and

(b) Accountable only to the Board.

10.3 The Board is responsible for overseeing the operations of the Dispute Resolution Committee, ensuring independent decision-making by the Dispute Resolution Committee and staff of The Financials Entities, and preserving the independence of The Financials Entities and its dispute resolution process.

10.4 To ensure that The Financials Entities is, and is perceived to be, independent, the Board comprises no Member representatives on the Dispute Resolution Committee.

10.5 Notwithstanding the monetary size of the Complaint being heard, The Financials Entities’s Chief Operating Officer is entitled to assist the Dispute Resolution Committee in the decision-making process if so requested.

11.1 Only the Board shall have the authority to appoint the Dispute Resolution Committee. The Dispute Resolution Committee is the sole body authorized to:

(a) Make any decision permitted under these Rules, including but not limited to reviewing whether a Complaint is within the jurisdiction of The Financials Entities and making a Ruling on this;

(b) Issue an Order; and

(c) Make an Award.

11.2 The Dispute Resolution Committee shall have the powers, functions, and duties conferred by these Rules, as well as those conferred and delegated by the Board from time to time.

12.1 The Financials Entities reserve the right to reject any claim if the claimant resides in Hong Kong or if the claim is otherwise related to Hong Kong.

12.2 A Complaint can be filed with The Financials Entities if:

(a) The Complainant is a Client;

(b) The Complaint is against a Member; and

(c) The Complainant has first attempted to resolve the issue with the Member through the Member’s internal dispute resolution (IDR) process.

13.1 The Financials Entities will address a Complaint if, in relation to a Financial Service provided by a Member, such Member has:

(a) breached the terms of the contract entered into between the Member and the Complainant concerning that Financial Service;

(b) failed to meet the standards of good practice in the Financial Services Industry; or

(c) acted unfairly towards the Complainant.

14.1 Once the Complaint is accepted by The Financials Entities, the Complainant may not raise any new grounds for the Complaint unless:

(a) the Member consents to it in writing; and

(b) The Financials Entities consents in writing to such terms and conditions as it deems appropriate.

14.2 For a Complainant to raise any new grounds related to the subject matter of a previously filed Complaint, the Complainant must withdraw their Complaint within 7 days of its acceptance by The Financials Entities and file an amended Complaint. Failure to do so will result in any additional grounds being disregarded by The Financials Entities.

15.1 Financial Entities shall deal with a Complaint if the Complainant’s loss resulting from the Member’s conduct does not exceed $1,000,000 or appear to exceed this amount. For the avoidance of doubt, regardless of the compensation amount awarded by Financial Entities to the Complainant, if the Compensation Fund is used to repay the Award, such payout may not exceed Financial Entities’s current monetary compensation limit (as described in Rule 2.2).

15.2 The Complainant can claim compensation for losses that are:

  • (a) Direct financial losses.

15.3 Punitive, exemplary, or aggravated damages will not be awarded.

15.4 Financial Entities may also award interest or earnings in addition to any compensation awarded.

15.5 If interest or earnings are awarded, they will be calculated from the date of the cause of action or matter giving rise to the Complainant’s claim. Financial Entities will consider relevant factors, including but not limited to, the extent to which the conduct of either party contributed to any delay.

16.1 A reference to a Complaint shall include any aspect of the Complaint. Financial Entities will not deal with a Complaint if, at the time of receiving the Complaint or at any time during Financial Entities’ process, Financial Entities is satisfied that:

  • (a) The Complaint concerns a Member’s acts or omissions that do not comprise a Financial Service.

  • (b) The Complaint is about someone who is not a Member at the time the Complaint is made.

  • (c) The Complainant is seeking compensation in an amount exceeding $1,000,000 USD.

  • (d) The Complaint concerns management account trading, including but not limited to the investment of monies or other funds on the financial or digital currency markets by a third party on behalf of the Complainant.

  • (e) The Complaint is regarding the execution of trades or orders on financial instruments that represent synthetic, non-market products, or any other type of financial instruments, the pricing of which, in the reasonable opinion of Financial Entities, cannot be independently verified.

  • (f) The Complaint relates to a fee, charge, or Entities, unless:

    • (i) The Complaint concerns the non-disclosure, misrepresentation, miscalculation, or incorrect application of the fee, charge, or Entities.
    • (ii) The fee, charge, or Entities is egregious by industry standards.

  • (g) The Complaint is about an issue or action done or not done by, or the policies or commercial judgment of, someone other than the Member the Complainant is complaining about.

  • (h) The Complainant is not the person to whom the Financial Services directly relate.

  • (i) The Complaint is not brought within 45 days from the moment of dispute arising between the Complainant and the Member.

  • (j) The Complaint has been dealt with by a court, tribunal, arbitrator, or another regulated or unregulated alternative dispute resolution body, unless:

    • (i) The Member has declined the Complainant’s request for the execution of a default judgment.
    • (ii) Both the Complainant and the Member consent in writing to the Complaint being considered by Financial Entities.
    • (iii) It is more appropriate for the Complaint to be dealt with in another forum such as a court or another type of judicial or arbitration tribunal.

  • (k) The Complainant has not undergone the IDR procedures established by the Member.

  • (l) The Complaint lacks substance or is being pursued by the Complainant for an improper purpose.

16.2 If the Complaint or any aspect of the Complaint is outside the jurisdiction of Financial Entities, the Dispute Resolution Committee may make a Ruling that the Complaint or an aspect of it cannot be heard by Financial Entities and will advise the Complainant in writing of this, setting out the reasons why the Complaint or relevant aspect of the Complaint is outside the jurisdiction of Financial Entities.

16.3 Notwithstanding the above, Financial Entities may from time to time invite (via an announcement on its website) traders to submit their grievances in relation to matters that may be outside the jurisdiction of Financial Entities (e.g., in relation to trading digital currencies), for evaluation and issuance of an opinion/report in relation to such dispute. Such opinion/reports, unless otherwise indicated by Financial Entities, shall be non-binding and for information purposes only. Financial Entities reserves the right not to apply the dispute resolution process or any part of it stated in these Rules to the evaluation and issuance of an opinion/report on such grievance.

16 A.1 Notwithstanding anything to the contrary in these Rules, Financial Entities has an absolute and unrestricted right to deny any Complaint. Examples of situations when a Complaint may be denied are as follows:

  • The Complainant is known to Financial Entities or in the Financial Services Industry in general as an untrustworthy person or a person who utilizes unfair or fraudulent practices in order to obtain gain from the Members;

  • The Complainant has previously abused the procedures of Financial Entities for a purpose which Financial Entities finds (in its sole discretion) improper;

  • The Complainant has violated any of the Rules; and

  • It came to the knowledge of Financial Entities that the Complainant engages in disparaging acts (including, but not limited to, statements in public forums) in relation to Financial Entities, its directors, members of the Dispute Resolution Committee (DRC) and Internal Compliance Committee (ICC), officers, and employees.

16 A.2 For the avoidance of doubt, the above examples are simply examples and Financial Entities, at its sole discretion, may deny a Complaint on any other ground. Financial Entities does not need to state the ground for denial (but may do so if it chooses) when informing the Complainant that their Complaint was rejected.

17.1 The Member must not charge the Complainant any fee in connection with a Complaint made to Financial Entities.

18.1 In dealing with a Complaint at any stage of the Financial Entities process, Financial Entities will observe procedural fairness and shall regard:

(a) good practice in the Financial Services Industry; and

(b) fairness in all the circumstances.

18.2 Dealing with a Complaint includes:

(a) deciding the extent to which a Complaint falls within the jurisdiction of Financial Entities and making a Ruling on this if it does not;

(b) assessing the merits of the Complaint;

(c) making recommendations to the Complainant and the Member about resolving it and reaching a settlement;

(d) issuing an Order; or

(e) making an Award.

18.3 When considering what constitutes good practice in the Financial Services Industry, Financial Entities may:

(a) consult with representatives of the Financial Services Industry;

(b) seek, but is not bound by, advice from such persons whom Financial Entities regard as suitably qualified to give such advice.

19.1 Every Member must have IDR procedures in place which comply with the standards and requirements of Financial Entities and are approved by Financial Entities. Prior to the adoption of such IDR procedures, a Member shall submit a draft of such procedures to Financial Entities for review and adequately address any comments or recommendations received from Financial Entities.

19.2 After recording a Complaint as received, Financial Entities will only continue to deal with the Complaint if the Complainant has first tried to resolve the Complaint with the Member using the Member’s IDR process, unless:

(a) Financial Entities considers that the Complaint or any aspect of the Complaint should be dealt with urgently; or

(b) it does not appear that the Complaint or an aspect of the Complaint is being addressed adequately or in a timely manner by the Member; or

(c) Financial Entities reasonably considers that it is appropriate in certain circumstances not to require the Complainant to first try to resolve the Complaint or an aspect of the Complaint with the Member.

19.3 A Complainant may make a Complaint to Financial Entities if:

(a) the Member does not give the Complainant a final response through its IDR within 14 days of receipt of the Complaint; or

(b) the Member otherwise gives a final response that the Complainant does not consider resolving the Complaint.

19.4 A Member must inform a Complainant of Financial Entities’ contact details and their right to refer the Complaint to Financial Entities:

(a) when the Member gives the Complainant a final response as a result of the IDR procedures within 14 days of receipt of the Complaint; or

(b) when the Member becomes aware that it will not be able to give a final response within the mentioned time frame.

20.1 A Complainant may make a Complaint to Financial Entities only in writing by completing the complaint form, which can be found on Financial Entities’ website (www.financialentities.com).

20.2 The Complainant can make a Complaint about two or more Members in relation to the same subject matter but must generally first try to resolve their Complaint with each of the Members concerned. These Rules apply with any necessary modifications in respect of a Complaint against two or more Members in relation to the same subject matter.

20.3 When making a Complaint, a Complainant shall:

(a) describe the nature of the dispute with the Member in reasonable detail, inform of the outcome of the IDR procedures with the Member, and specify the compensation or corrective action they are seeking from the Member to resolve the Complaint;

(b) provide Financial Entities with copies of supporting documentation and every document relevant to the Complaint; and

(c) consent in writing (which can be done by clearly stating so in the Complaint) to Financial Entities providing a copy of the Complaint and supporting documentation to the relevant Member.

21.1 Without in any way limiting what Financial Entities can do, the Dispute Resolution Committee can, at any time and from time to time during the Financial Entities process, do all or any of the following things:

(a) ask any party questions about the Complaint;

(b) require any party promptly to provide to, or procure for, the Dispute Resolution Committee any information and documents that the Dispute Resolution Committee considers necessary within a certain time, except where the party satisfies the Dispute Resolution Committee that:

(i) provision of information would breach a duty of confidentiality to a third party and, despite best endeavors, the third party’s consent to the disclosure of the information has not been able to be obtained;

(ii) provision of information would breach a court order or prejudice a current investigation by the police or other law enforcement agency; or

Failure to submit such documents or information and in the absence of a reasonable explanation allows the Dispute Resolution Committee to reserve the right to draw such inferences as it considers appropriate.

(c) ask any party for their comments generally on the other party’s responses to Financial Entities;

(d) send to one party copies of:

(i) the other party’s comments on the Complaint;

(ii) the other party’s answers to questions asked; and

(iii) information provided to the Dispute Resolution Committee by the other party;

(e) at the expense of the Member, obtain such specialist advice as Financial Entities reasonably considers desirable or necessary to deal with the Complaint.

21.2 The Dispute Resolution Committee is not bound by any legal rule of evidence and may inform itself about the Complaint and all matters relating to it in whichever manner and by whichever means, in its sole discretion, it shall deem appropriate.

22.1 At the first stage of the dispute resolution process, Financial Entities will conduct an investigation into the merits of the Complaint. During the Investigation Phase, Financial Entities may carry out whatever reconciliation and investigation process it thinks appropriate to deal with the Complaint, including conducting oral conferences with the parties, requesting any additional documents, and obtaining advice from experts.

22.2 If Financial Entities requires additional documents from the Member or the Client, both are required to respond to Financial Entities within 7 days or provide a reasonable explanation as to why more time is needed.

22.3 If there is no response given within 7 days, Financial Entities will proceed in the decision-making process with the information it has on file. A lack of response from the Member or the Client could affect the outcome of the decision of the dispute.

22.4 Financial Entities may carry out the investigation process until it is reasonably satisfied that it is in possession of all relevant information regarding the merits of the Complaint.

22.5 Having completed its investigation, Financial Entities may:

(a) give the Complainant and the Member Financial Entities’s assessment of the merits of the Complaint; and/or

(b) make a recommendation to the Complainant and the Member about resolving the Complaint.

22.6 If no settlement of the Complaint is achieved between the parties during the Investigation Phase, Financial Entities may declare this phase completed and proceed to the Determination Phase.

23.1 At the Determination Phase, the Dispute Resolution Committee will decide on the merits of the Complaint.

23.2 The Dispute Resolution Committee will generally decide on the merits of the Complaint based upon:

(a) the Complaint;

(b) the Member’s response;

(c) the Complainant’s reply; and

(d) information and documents Financial Entities has received during its process, including any advice from suitably qualified people.

23.3 The Dispute Resolution Committee may decide as follows:

(a) make an Award to the Complainant that the Member shall pay the Complainant compensation for any loss the Complainant has suffered up to the monetary compensation limit; and/or

(b) issue an Order that the Member do some act or refrain from doing some act in relation to the subject matter of the Complaint; or

(c) deny the Complaint, refuse the Complainant any remedy, and declare the Complaint closed.

23.4 The Dispute Resolution Committee’s decision will be in writing and will include the Dispute Resolution Committee’s reasons underlying the decision.

23.5 If the Dispute Resolution Committee makes an Award, the amount of compensation will be determined by what the Dispute Resolution Committee believes is sufficient but not more than is required to compensate the Complainant for its loss as a result of the act or omission of the Member.

23.6 If the Dispute Resolution Committee issues an Order, in considering whether the Order should require the Member to do or refrain from doing some act, the Dispute Resolution Committee will have regard to what is fair and reasonable to put the Complainant and the Member in the position the Complainant and the Member would have been in were it not for the act or omission of the Member.

23.7 In doing this, the Dispute Resolution Committee will consider what is fair and reasonable for all parties, including someone who is not a party to the Complaint but who might be affected by the Dispute Resolution Committee’s decision.

23.8 The Dispute Resolution Committee’s decision will be binding on a Complainant only if he accepts such decision in writing within 14 days of the receipt of the written decision from the Dispute Resolution Committee. If the Complainant accepts the decision, the Complainant must provide the Member (if the Member so requests) with a binding release of the Member from liability in respect of the matters resolved by the decision. The release must be for the full value of the claim which was the subject of the Complaint, even if the amount of the claim exceeds the amount of the remedy decided upon by Financial Entities. The Dispute Resolution Committee’s decision becomes binding on a Member only if the Complainant accepts that decision in full and final settlement of his Complaint against the Member (and executes the necessary release, if requested by the Member).

23.9 If the Member requests that the Complainant should provide a release to such Member, the Member shall within 7 days of the receipt of the Dispute Resolution Committee’s decision make a written request of such release and provide both Financial Entities and the Complainant with the text of such release. The release shall have the effect and only the effect of releasing the Member from any further legal liability to the Complainant and precluding commencement of legal proceedings by the Complainant against the Member in relation to the subject matter of the Complaint on condition that the Member has fully complied with the determination. Financial Entities reserves the right to review and amend the text of the release as it reasonably deems appropriate in order for the release not to negate the effect of any decision made by the Dispute Resolution Committee.

23.10 If the Dispute Resolution Committee does not receive the Complainant’s signed acceptance of its decision and a signed release (if requested so by the Member) within 14 days after the receipt of the Dispute Resolution Committee’s decision, the Dispute Resolution Committee may declare the Complaint closed.

23.11 Whenever the Dispute Resolution Committee makes an Award or issues an Order, the Member must comply with it fully and within the time period specified in such Award or Order. If the Dispute Resolution Committee’s Award or Order does not specify a particular time period, then the Member must comply with the Award or Order as soon as practicable.

23.12 Financial Entities may publish a non-identifying copy of the Dispute Resolution Committee’s determination of the Complaint on Financial Entities’s website, unless either party requested in writing that a decision be made on a confidential basis and not subject to public disclosure.

24.1 At any time and from time to time during the Financial Entities process, if it thinks it appropriate to do so, Financial Entities may:

(a) refer the Complaint back to the Member and afford it another opportunity to reconsider its position given Financial Entities’s preliminary view of the merits of the Complaint;

(b) facilitate informal negotiations between the parties to resolve the Complaint or any aspect of the Complaint; or

(c) suggest that the Complaint be settled or withdrawn, with or without conditions, with the agreement of both parties in full and final settlement of the Complaint.

24.2 If parties reach a settlement, they shall provide Financial Entities with a copy of the executed settlement agreement so that Financial Entities can declare the Complaint closed.

24.3 If Financial Entities is satisfied that:

(a) the settlement agreement was validly signed and executed by all the parties;

(b) the Complaint was within Financial Entities’s jurisdiction; and

(c) the Member has failed to comply with the settlement agreement,

The Dispute Resolution Committee may make an Award on terms of the settlement agreement to enforce it.

 
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25.1 Where Financial Entities reasonably considers that an offer made by a Member to a Complainant to resolve a Complaint is reasonable, having regard to the information before it, Financial Entities may recommend to the Complainant that he shall accept the Member’s offer in full and final settlement of the Complaint.

25.2 If the Complainant does not accept the offer, Financial Entities may close the Complaint in the absence of further information from the Complainant that would justify the Complaint remaining open. If Financial Entities closes the Complaint, it will notify the Complainant and Member that it has done so.

26.1 Non-compliance Procedure:

  • If a party (either the Member or the Complainant) does not comply with a requirement set by Financial Entities within the time period specified:

    (a) Financial Entities may grant the party an extension period it deems appropriate to comply.

    (b) If the Member still fails to comply:

    (i) The Dispute Resolution Committee may decide to proceed with determining the Complaint based on the information and documents available at that time.

    (ii) Financial Entities may expel the Member as a member of Financial Entities.

    (c) If the Complainant still does not comply, Financial Entities may declare the Complaint closed, or if the requirement only relates to a specific aspect of the Complaint, Financial Entities may decline to consider that aspect further while continuing to deal with other aspects.

26.2 The expression “Financial Entities requirement” refers to any requirement imposed by Financial Entities or these Rules on the Complainant or the Member, including the need to respond within a specific timeframe or provide requested information or documents.

27.1 If a Member fails to comply with an Award or Order of the Dispute Resolution Committee within the specified time frame (or if no time is specified, as soon as practicable), Financial Entities may issue the Member a 28-day written notice to comply. If the Member still fails to comply, Financial Entities may take whatever action is necessary to enforce the Award or Order, including but not limited to:

(a) Taking action to suspend or cancel the Member’s membership with Financial Entities;

(b) Initiating legal proceedings for specific performance of the Member’s agreement to abide by Financial Entities’ Rules, including the Member’s obligation to comply with the Award or Order;

(c) Taking such other action as Financial Entities deems appropriate to secure compliance with the Member’s obligations under Financial Entities’ Rules.

 

28.1 Financial Entities will suspend dealing with a Complaint if during the Investigation Phase the Member gives an Objection Notice to Financial Entities and is able to demonstrate to Financial Entities’ reasonable satisfaction:

(a) that the Complaint involves or may involve an issue which could have important consequences for the Member’s business or the Financial Services Industry generally; or

(b) that the Complaint raises an important or novel point of law.

28.2 A Member who gives an Objection Notice must:

(a) identify and describe the issues which could have important consequences for the Member’s business or the Financial Services Industry generally as the issues relate to the Complaint; or

(b) identify and describe the important or novel point of law as it relates to the issues raised in the Complaint; and

(c) advise Financial Entities of the grounds on which the Member seeks a declaration from the court or any other judicial or arbitration tribunal and how the declaration being sought relates to the issues raised in the Complaint.

28.3 Financial Entities will refuse to accept an Objection Notice if:

(a) the Member has not complied with these Rules;

(b) Financial Entities reasonably considers that the Member has inadequate grounds for seeking a declaration from court or any other judicial or arbitration tribunal;

(c) having regard to all other relevant circumstances, Financial Entities is reasonably satisfied that the Member has given Financial Entities the Objection Notice for an improper purpose; or

(d) the Member previously gave Financial Entities an Objection Notice in relation to the same Complaint, in which case, Financial Entities will give the Member written notice of the refusal and will continue to deal with the Complaint.

28.4 If the Member does not commence judicial or arbitration proceedings on the issues specified in the Objection Notice within 14 days of giving the Objection Notice to Financial Entities, then Financial Entities will deal with the Complaint as if the Objection Notice had not been given.

29.1 If The Financial Entities believe that:

(a) it would not unfairly prejudice the Complainant or the Member; and

(b) it would lead to a more efficient and effective resolution of the Complaint, The Financial Entities may allow or require another Member (called the “Third Party Member”) to be joined as a party to the Complaint.

29.2 The Financial Entities may impose terms and conditions on joining a Third Party Member. For example, The Financial Entities may require the Member the Complainant has complained about to pay costs or to provide security for future costs.

29.3 Once a Third Party Member has been joined in the Complaint, The Financial Entities may give directions about how the Complaint will be dealt with.

29.4 A Third Party Member has all the rights and duties under these Rules as if that Third Party Member were the Member as referred to in the Rules.

29.5 Where a Third Party Member has been joined, these Rules are to be read to include that Third Party Member with appropriate changes being made.

30.1 Neither party is required to have legal or other representation (“representation”) while The Financial Entities deals with the Complaint.

30.2 If a party chooses to be legally or otherwise represented, this will be at its own cost.

31.1 All statements the Complainant or Member makes and information or documents they provide to The Financial Entities are made on a “without prejudice” basis. This shall mean that anything said or done or information provided to The Financial Entities during The Financial Entities process cannot be used in subsequent legal proceedings unless required by an appropriate court process.

31.2 Any information obtained by The Financial Entities during The Financial Entities process may not be disclosed by:

(a) the Complainant;

(b) the Member; or

(c) The Financial Entities,

to anyone else unless disclosure is required by law or required or permitted by The Financial Entities’s Rules.

32.1 Any party to a Complaint who believes that disclosure of any information or document to The Financial Entities will place them in breach of a duty of confidentiality they owe to someone else shall notify The Financial Entities. The party claiming confidentiality shall use its best endeavors to obtain the consent of the person to whom the duty is owed to disclose the information or document. If the consent is not received within a reasonable time, then the party claiming confidentiality will not be required to comply with any direction from The Financial Entities that the information or document be provided.

32.2 If The Financial Entities receives any information or document from any party to a Complaint with a request from that party that it be treated confidentially, The Financial Entities will not disclose that information or document to any other party or to any other person except:

(a) with the consent of the person supplying the information or document, or

(b) as required by law or required or permitted by these Rules or The Financial Entities’s Rules.

32.3 The Financial Entities will not use or rely on any confidential information or document provided by one party to make a finding adverse to any other party, unless it:

(a) reasonably considers that the information or document is genuine and credible; and

(b) informs any party against whom an adverse finding may be made that it is in receipt of the confidential information or document; and

(c) identifies the confidential information or document to any party against whom an adverse finding may be made; and

(d) If appropriate, summarizes the confidential information or the relevant contents of the document to any party against whom an adverse finding may be made.

32.4 Before The Financial Entities ends any confidential information or document to another forum, The Financial Entities will obtain in writing the consent of the party claiming confidentiality.

32.5 Except where these Rules, or the law prohibits it, The Financial Entities may at its discretion disclose the Complaint, the Member’s response, the Complainant’s reply and any information or document obtained by The Financial Entities during The Financial Entities process to the Board, Dispute Resolution Committee, any The Financial Entities employee, consultant, contractor or agent to the extent that is appropriate to do so to enable the person to fully and effectively carry out their powers, functions or duties.

32.6 The Financial Entities will not be obliged to make available to the parties any memorandum, analysis, file notes or any other documents generated by The Financial Entities’s employees, consultants, contractors or agents.

32.7 Notwithstanding anything set forth in these Rules, any party to a Complaint who receives from The Financial Entities any document prepared by The Financial Entities or provided to The Financial Entities by another party:

(a) must use that document only for the purpose of dispute resolution in accordance with and as contemplated by The Financial Entities Rules; and

(b) must not, except as required by law or legal proceedings, disclose the document to any other person without the prior written consent of The Financial Entities, which consent may be subject to such conditions as The Financial Entities may in its absolute discretion consider appropriate, and for the purposes of this Rule “disclose” includes communicating or divulging by any means or in any form whether written, electronic or oral or otherwise, including copying by any means and in any form the whole or any part of the document.

33.1 The Financial Entities may of its own volition or on the application of a party at any time and from time to time at its discretion and on whatever conditions it sees fit to impose, exempt a party from any one or more of these Rules. Before The Financial Entities grants any exemption, it must satisfy itself that doing so:

(a) is necessary to ensure the efficient and effective resolution of the Complaint; and

(b) would not be otherwise prejudicial or unfair to or impose an unreasonable burden or disadvantage on any party.

34.1 The Financial Entities may of its own volition or on the application of a party at its discretion and on whatever conditions it sees fit to impose extend any time for compliance with any matter under these Rules. Before The Financial Entities grants any extension of time, it must satisfy itself that doing so would not be unfair to or impose an unreasonable burden or disadvantage on any party.

35.1 The Financial Entities may at any time declare a Complaint closed in any of the following cases:

(a) the Complaint is or becomes outside of The Financial Entities’s jurisdiction;

(b) the Complaint is withdrawn, settled, or resolved; or

(c) The Financial Entities deems the Complaint withdrawn by reason of the Complainant’s failure to respond to The Financial Entities’s communications within the period specified by The Financial Entities; or

(d) the Complainant does not accept the Member’s offer which The Financial Entities considers reasonable having regard to the information before The Financial Entities and recommends the Complainant to accept (in the absence of further information from the Complainant that would justify the Complaint remaining open);

(e) the Complainant does not accept The Financial Entities’s determination of the Complaint;

(f) The Financial Entities is not satisfied that the Complaint is properly presented by the Complainant; or

(g) The Financial Entities is unable to locate the Member despite its reasonable efforts to do so;

(h) The Financial Entities learns of any ground listed in Rule 16A.1.

36.1 The Financial Entities will not be bound by any previous The Financial Entities decisions, but will endeavor to be consistent in its decision-making.

36.2 A previous The Financial Entities decision includes but is not limited to a Ruling, Order, or an Award.

36.3 If The Financial Entities deems it appropriate, The Financial Entities will send the Complainant and the Member a copy of or extract from a The Financial Entities policy that The Financial Entities thinks is relevant to their Complaint.

37.1 Every The Financial Entities decision is final and binding on a Member. Neither the Complainant nor the Member may file any appeals, and as such The Financial Entities’s decision is non-appealable. A Member may not challenge an Order or an Award in a court or other judicial or arbitration tribunal unless there is new information that can be presented that would affect the outcome of the Complaint.

37.2 The Financial Entities decision may only be reviewed or reopened in the circumstances allowed in these Rules or The Financial Entities guidelines.

37.3 The Financial Entities decision is only binding on a Complainant if the Complainant accepts it. If the Complainant does not accept a The Financial Entities decision, the Complainant is at liberty to pursue other remedies in relation to the subject matter of the Complaint in courts or any other judicial or arbitration forum, but not with The Financial Entities. If the Complainant does this, The Financial Entities can declare the Complaint closed and no The Financial Entities decision will have any force or effect against the Member in relation to the Complaint.

37.4 If upon the Dispute Resolution Committee’s own motion or upon application by a party within 28 days after the date on which an Order or Award was sent to that party, the Dispute Resolution Committee has determined that in relation to that Order or Award:

(a) a clerical mistake was made; or

(b) there was an accidental error or omission; or

(c) there is a material miscalculation of figures or a material mistake in the description of any person, thing, or matter; or

(d) there is a defect in form; or

(e) the terms of the Order or Award do not reflect the Dispute Resolution Committee’s actual intentions,

The Dispute Resolution Committee may:

(i) make whatever amendments to the Order or Award it thinks appropriate; or

(ii) re-issue the Order or Award; or

(iii) give such directions as it thinks appropriate (including directions about times for compliance) in connection with the Order or Award.

39.1 The Board and all Members must ensure that The Financial Entities is appropriately and effectively publicized.

39.2 The Financial Entities’s logo and mark shall only be permitted for use and distribution for Members in good standing. The use of The Financial Entities logo or mark is strictly forbidden unless authorized by The Financial Entities.

39.3 Unless the contrary is expressly indicated by The Financial Entities in its Award or Order (as applicable), neither the Complainant nor the Member may publicize, share, transfer to any person, or otherwise distribute any part of the Order, Award, any correspondence between The Financial Entities and the Complainant or the Member, or any information which was disclosed by any person during the Complaint resolution process. If the Complainant or the Member violate this provision of the Rules, The Financial Entities may annul any of its Orders or Awards made in relation to any Complaint filed by such Complainant or against such Member, as the case may be.

41.1 The Member must not instigate defamation action of any kind against a Complainant or The Financial Entities in respect of allegations made to The Financial Entities by the Complainant about the Member.

41.2 Any criticism of a The Financial Entities decision in a public forum or on a Member’s website is prohibited and could result in dismissal from The Financial Entities.

41.1 Defamation Actions
A Member must not initiate any defamation action against a Complainant or The Financials Entities concerning allegations made to The Financials Entities by the Complainant about the Member. This includes any legal or formal actions aimed at disputing or undermining the allegations.

41.2 Public Criticism
Members are prohibited from publicly criticizing any decision made by The Financials Entities. This includes posting critical remarks on public forums, websites, or any other media. Engaging in such criticism may result in disciplinary action, including potential dismissal from The Financials Entities.

This version clarifies the restrictions on defamation actions and public criticism, emphasizing the importance of maintaining a professional and respectful approach in all interactions related to The Financials Entities.

42.1 The Financial Entities may give a document, demand, notice, or other communication (“notice”) to any party:

(a) personally;

(b) by sending it by post to the address of a party that it has on file; or

(c) by sending it to a fax number or e-mail address of a party that it has on file.

Post

42.2 A document sent by post must be sent by courier mail and shall be deemed to have been received on the day of its delivery to the relevant address.

Fax or e-mail

42.3 If a document is sent by fax or e-mail, delivery of the document is deemed to occur on the next day following the date of such fax or e-mail transmission.

Evidence of service

42.4 A certificate in writing signed by a director or officer of The Financial Entities stating that a document was sent to a party by post or by fax or e-mail on a particular date is prima facie evidence that the document was so sent on that date.

43.1 Certain words and phrases have the special meanings set out below:

“Award” shall mean the binding determination made by the Dispute Resolution Committee which may award any compensation to the Complainant;

“Board” shall mean the board of directors of The Financial Entities;

“Complainant” shall mean a Client who makes a Complaint to The Financial Entities about a Member or Members, but does not include a person who is a member of The Financial Entities unless the person did not, at the time the event complained about occurred, have a business relationship with the Member against whom the Complaint is made;

“Complaint” shall mean:

(a) for the purpose of IDR, an expression of dissatisfaction made to a Member, related to its conduct, products or services, or the complaints handling process itself, where a response or resolution is explicitly or implicitly expected; and

(b) for the purpose of EDR, an expression of dissatisfaction made to The Financial Entities, related to a Member’s conduct, products or services, whether or not the Complainant has first tried to resolve the Complaint with the Member using the Member’s IDR process;

“Client” shall mean an individual (whether acting as a trustee or otherwise), a partnership comprising individuals, or a small business, but does not include an individual that The Financial Entities determines is not a client for the purposes of Rules or guidelines because of the assets, wealth, or both, that the person has, holds, or controls;

“The Financial Entities’s website” or “website” shall mean the website maintained by The Financial Entities at www.financialentities.com;

“The Financial Entities process” shall mean the process for dealing with a Complaint under these Rules;

“Determination Phase” shall mean the phase during which the Dispute Resolution Committee makes a decision on the merits of the Complaint and, as required, makes an Award or issues an Order;

“EDR” shall have the meaning given thereto in Rule 1.1;

“Financial Service” shall mean either services and/or products within the scope of financial trading including but not limited to Forex, Options, Commodities, Equities, or Binary Options;

“Financial Services Provider” shall mean any individual or organization that offers, for compensation, Financial Services;

“Financial Services Industry” shall mean a collection of Financial Services Providers;

“IDR” shall mean internal dispute resolution involving a procedure adopted by a Member to consider a Complaint;

“Investigation Phase” shall mean the investigation phase of The Financial Entities process;

“Member” shall mean a person, firm, or corporation which is a member of The Financial Entities;

“Monetary compensation limit” shall mean an amount not exceeding €20,000, as may be amended from time to time; Note: Separate claims by the same Complainant will not be aggregated for the purpose of determining a maximum monetary compensation limit;

“Order” shall mean a determination made by the Dispute Resolution Committee prescribing a certain mode of conduct to a Member;

“Rules” shall mean these Rules;

“Ruling” shall mean a Ruling by the Dispute Resolution Committee as to whether a Complaint or any aspect of a Complaint can be dealt with under these Rules or about any matter that arises in the course of The Financial Entities dealing with the Complaint;

43.2 Unless the context suggests otherwise:

(a) the singular includes the plural and vice versa;

(b) any reference to a party to a Complaint includes that party’s executors, administrators, or permitted assigns;

(c) a reference to one gender includes every gender;

(d) headings are for reference purposes only; and

(e) references to any applicable law including but not limited to any regulations and other rules made under it and to consolidations, re-enactments, amendments, or replacements of it.

43.3 In calculating compliance with a time period by reference to a number of “days”, shall include weekends but not include any global public holiday or public holiday pertaining to the country of residence of the Member.

43.4 Whenever these Rules refer to information, they shall include information or evidence in any form and from any source, but do not include information or evidence that has been or appears to be illegally obtained.

“Reserved”

“Reserved”

1. General Standard

Members handling orders must establish and enforce written procedures to record and maintain essential information about customer orders and account activity.

2. Transaction Records

Electronic trading systems must record the following details for each transaction:

  • Buy or sell
  • Date and time the order is received by the system
  • Price (or premium for an option) at which the order is placed
  • Price (or premium for an option) quoted on the trading platform when the order was placed (if applicable)
  • Account identification
  • Currency pair
  • Size
  • Type of order (if not a straight market order)
  • Date and time the execution information is reported by the system
  • Date and time the order is transmitted to the trading platform
  • Date and time of execution

For options, the system must also record:

  • Put or call
  • Strike price
  • Expiration date

All times must be recorded to the nearest second. The system must also capture any additional necessary information, such as re-quotes or reasons for non-execution (e.g., insufficient account equity). For transactions not subject to daily rollovers, the expiration date must be recorded.

The same information must be recorded for liquidating orders. If customers place orders as liquidating, they should be identified as such. If generated by the system due to insufficient equity, this should be recorded. If customers enter them as new orders, they need not be identified as liquidating orders, even if they result in an offset.

Electronic trading platforms should record the following for rollovers:

  • Account identification
  • Currency pair
  • Size
  • Long or short
  • Date and time of the rollover
  • Price of the position after the rollover
  • Bid and ask prices quoted on the platform at the time of rollover
  • Any fees charged for the rollover

The platform should also provide information on the amount of interest credited or debited to the account and offer a report on all transactions (excluding rollovers) executed on that day, including time, price (or premium), quantity, long or short position, currency pair, account identification, and, for options, strike price, put or call, and expiration date.

3. Account Records

Electronic trading platforms must create and maintain daily records that include:

  • Account balance (funds in the account plus or minus open trade equity)
  • Account identification
  • Funds in the account (net of any Entities and fees)
  • Open trade equity (net profits and losses on open trades)

For open option positions, adjust the account balance for the net option value, and include:

  • Date and time of each rollover transaction (if treated as two transactions)
  • Long option value
  • Short option value
  • Net option value

4. Time and Price Records

Electronic trading platforms must maintain daily logs of:

  • Each price change on the platform
  • The time of each change to the nearest second
  • Trading volume at that time and price

Upon request by a customer, the Member should provide time and price records covering all executed transactions for the same currency pair or option during the relevant period.

5. Profit and Loss Reports

Electronic trading platforms must be capable of producing, upon request:

  • Monthly and yearly realized and unrealized profits and losses by customer
  • Year-end reports showing realized profits and losses for the calendar year and unrealized profits and losses on open positions

6. Retention

Members must maintain these records and ensure they are readily accessible. These records must be open to inspection by The Financial Entities, and copies must be provided upon request.

7. Reviews

Members should conduct periodic reviews to ensure that the electronic trading platform maintains the required data and can generate the necessary reports.

Voice Risk Disclosure Requirement Procedure

This procedure outlines the necessary steps for members of The Financials Entities when providing investment advice through voice methods, including telephone or digital voice communication, or other digital methods. The aim is to ensure that clients receive proper risk disclosures and that these disclosures are properly documented.

1. Disclosure Record Keeping

1.1 Review of Voice Risk Disclosure (VRD)
All Members must review and utilize the written Voice Risk Disclosure (VRD) provided by The Financials Entities. The VRD must be available in English and any other relevant languages used by the member.

1.2 Client Oral Acceptance
The member brokerage firm must obtain the client’s oral acceptance of the standard trading risk disclosure. This disclosure must be exactly as specified by The Financials Entities and must outline the relevant risks of trading and the implications of relying on investment advice.

1.3 Client Agreement Clause
The client agreement must include a separate clause that waives the firm’s liability for the financial outcome of investments made based on advice provided through voice methods. This clause should explicitly state that the firm is not responsible for losses incurred as a result of such advice.

2. Audio Voice Record Keeping

2.1 Recording Client Acknowledgment
The member firm must record an audio file where the client acknowledges and accepts full risk of loss for any investments made based on advice provided via voice methods by the company or its agents.

2.2 Audio Record Content
The audio recording must include the following details:

  • Client’s Full Name: As reflected on their account with the relevant member firm.
  • Client’s Trading Account: Identification of the trading account held with the relevant member firm.
  • Client’s Acceptance and Understanding of Risks: Explicit acknowledgment by the client of the trading risks associated with their account.

3. Complaint Filing Requirements

3.1 Submission of Records
If a complaint is filed with The Financials Entities by either the member firm or the client, the member firm must provide both the document and audio voice records that demonstrate the client’s acceptance and understanding of trading risks upon first request. This is necessary for proper processing of the complaint through the established channels.

This version ensures that the procedure is clear and addresses all necessary aspects of risk disclosure and documentation requirements.