The Financial Commission received a record of 1340 complaints in the fiscal year of 2020, and the amount it recovered for broker member customers more than doubled from a year earlier.
According to its latest annual report, the self-regulator made progress across some of its key business drivers. Specifically, the number of new complaints rose 32% year-over-year as a record $10.9 million sought by traders in 2020, 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.
The annual enforcement report further reveals that the majority of complaints the commission received in 2020 were related to financial issues with 55% of the total, while trading related disputes accounted for 25%. The most popular topics for complaints dealt with funds withdrawal (31%), agreement breach (17%), price check (14%) and account blocking (6%).
Other highlights show the amount of total compensations awarded to broker member clients in 2020 increased to $1.49 million, which is up from $602,000 in 2019, but still slightly less than a record $1,564,700 it awarded in 2017. Further, the value of the average complaint rose 20% year-over-year to $8,812.
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FinaCom said the dispute resolution time was stable in 2020, which reflects the speedy processing during a period of record numbers of processed complaints and the complexity of submitted cases. Specifically, the average timeframe of resolving the complaint was longer by nearly 3% to 6.97 days from 6.77 days in 2019.
12 New Members Joined the Financial Commission
Elsewhere, the Commission remained steadfast in improving its core business in 2020 with the launch of additional services for broker members. Among other things, the organization expanded its international presence by 25% as compared to 2019 with the addition of 12 new approved brokers to its membership roster. Moreover, it certified the offering of a new education provider and added a new member to its Blockchain Association.
During the year, many of the existing members have also upgraded their category of membership to A level.
Finally, the Financial Commission saw higher adoption for its dispute resolution service in Asia, the Middle East and Africa with new complaints from these regions growing 202%, 15% and 14%, respectively in 2020. On the other hand, complaints from Russia and former Soviet republics dropped by nearly 20%, citing local market restrictions which “impeded the normal online trading operations FX and CFD traders have come to expect.”