The Financial Commission (FinaCom PLC) today issued an execution certification for AmorFX as the industry-specific association attempts to reduce the number of execution-related disputes that occur before they progress into formal complaints.
AmorFX is a multi-asset brokerage firm that offers trading of FX, indices, CFDs and commodities. The brand is solely focused on the Turkish market though it apparently has no regulation status in the country.
Turkey’s regulators have been tough on retail FX business, and since 2017 they had given no indication of their intention to revise the significant limitations on forex regulations. In 2018, the CBM introduced amendments in leveraged forex trading transactions. The board brought a minimum margin of TL 50,000 (USD6,840), and the leverage was rearranged as 10:1. Previously, before the amendment, it was 100:1.
The FinaCom’s assessments depend on VerifyMyTrade, a post-trade solution that has developed capabilities to accurately measure the execution quality of positions across the retail FX market.
The service was introduced in 2018 and allows clients of the commission’s brokerage members to use its analysis tool to check whether their trades were fairly priced or not.
Verify My Trade consolidates price feeds from dozens of retail forex brokers to produce statistical box plots, which are a representation of the minimum, maximum and percentiles of the ticks received for every second of the day.
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Helping Settle Price Disputes Internally
To maintain their certified status, the audited platforms are required to continuously submit their order execution data to the VMT analysis tool, which maps the execution price to the boxplot for that time of day to assess the effectiveness and quality of the broker’s execution.
Due to the price verification capabilities, brokers who implement the service would be able to settle price disputes internally, by inducing evidence on asset prices at any given time, from an impartial party.
And, in case the client claims that he is consistently getting poor execution, the analysis results will facilitate handling execution-related trade disputes.
According to its latest annual report, the self-regulator received a record number of complaints in 2020. These were up 32% year-over-year as a record $10.9 million was sought by traders this year, which is up from $7.4 million in 2019.
Likewise, the number of resolved complaints in ‘clients favor’ increased 31% from the previous year. Of all resolved complaints, 52% were resolved ‘in favor of the broker’ and 18% resolved ‘in favor of the client’, while 30% of cases the commission assessed were found to be out of its jurisdiction.