Not upheld: Investment mis-selling complaint against OANDA Europe Limited

Decision detail

Summary

Mr I complained that OANDA Europe Limited wrongly applied a margin closeout on his S&P 500 position on 21 September 2020, resulting in a loss of 10,270.50 USD. He argued the business should have closed positions incrementally, provided alternative protective features, and reinstated his positions after closure. He also claimed the business blocked his account access, preventing him from funding his account to avoid the closeout. The ombudsman found the business correctly applied margin closeout in accordance with FCA regulations when his account balance fell below 50% of the required margin. Mr I's access issues were due to poor internet connection at a funeral, not business fault. The ombudsman upheld the business's position that it had no obligation to reinstate positions or provide features beyond those in its terms of business, and that Mr I bore responsibility for maintaining sufficient margin at all times.

The Ombudsman's reasoning

The ombudsman found that the business correctly applied margin closeout in accordance with FCA regulations (COBS 22.5.13R) which require firms to close retail clients' positions when net equity falls below 50% of the margin requirement. The business's terms of business explicitly permitted closure of 'some or all' open positions, and the definition of 'margin closeout' indicated automatic closure of all positions. Mr I's inability to access his account to add funds was due to poor internet connection (as he originally stated), not any fault of the business. The business had no obligation to reinstate positions after a correctly applied margin closeout, nor to provide alternative features like offline wallets or auto-leverage adjustment. The terms of business made clear it was Mr I's responsibility to maintain sufficient margin at all times.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website