Not upheld: Investment mis-selling complaint against XTB Limited

Decision detail

Summary

Mr D complained that XTB Limited unfairly closed 12 of his CFD positions on 5 August 2024 due to margin call, resulting in a loss of £4,412.18. XTB closed the positions using a 'maximum loss first' method rather than FIFO (first in first out) as referenced in some of XTB's terms. Mr D argued this violated FCA rules on acting in clients' best interests and most favourable execution terms. The ombudsman found that the 'maximum loss first' method was required by FCA regulations (COBS 22.5.13R), explicitly stated in XTB's Best Execution Policy which Mr D had agreed to, and actually protected the customer's account from further losses. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that XTB was required by FCA rules (COBS 22.5.13R) to close positions when net equity fell below 50% of margin requirement. The 'maximum loss first' method was explicitly stated in XTB's Best Execution Policy which Mr D agreed to at account opening. This method protects the customer's account from going negative and further losses, which is consistent with the client's best interests rule (COBS 2.1.1R). The ombudsman rejected Mr D's argument that the method was unfair or unlawful, noting that XTB applied it consistently to all clients and that Mr D could choose another firm if he disagreed with the closure method.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website