Not upheld: Investment mis-selling complaint against CMC Markets UK plc

Decision detail

Summary

Mr M complained that CMC Markets unfairly closed his spread-bet positions automatically at 08:02:24 on 7 April 2025, even though he was logged into the platform and attempting to deposit £4,000 to meet margin requirements following a margin alert received at 08:00:18. The deposit was credited at 08:06, after the positions had already been closed, resulting in a loss of £18,315.86. CMC explained that its platform is fully automated and execution-only, with automatic close-out triggered when the Account Revaluation Amount falls to 50% of required margin. The ombudsman upheld CMC's position, finding that Mr M understood his responsibilities as an experienced trader, that CMC's Terms of Business explicitly permitted automatic close-out, and that warnings are not guarantees of time to deposit funds before liquidation occurs.

The Ombudsman's reasoning

The ombudsman found that CMC acted fairly because: (1) the Terms of Business explicitly state that positions may be closed automatically if margin thresholds are breached and that clients are responsible for monitoring their accounts; (2) Mr M understood these responsibilities as an experienced trader who had managed multiple margin alerts previously; (3) warnings are intended to assist but not guarantee prevention of close-out; (4) delaying close-out would require CMC to make trading decisions on Mr M's behalf, inconsistent with the execution-only nature of the account; (5) CMC complied with the FCA's Consumer Duty by sending timely alerts and following established procedures; and (6) the losses arose from rapid market movements and agreed account rules rather than any CMC failing.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website