Not upheld: failure to close positions upon relocation, inadequate risk warnings, inappropriate trading approval complaint against Stratos Markets Limited trading as FXCM

Decision detail

Summary

Mr K complained that FXCM failed to close his CFD trading positions after he relocated to a non-UK country in March 2024, and that FXCM provided inadequate risk warnings and should not have approved him for trading. FXCM argued it had no obligation to close positions based on relocation, as CFD trading restrictions do not apply to non-UK residents (unlike spread betting), and that it properly conducted an appropriateness test based on Mr K's stated experience. The ombudsman found FXCM had no contractual or regulatory obligation to close the positions, that adequate risk warnings were provided in clear documentation, and that the appropriateness test was properly conducted based on Mr K's answers indicating substantial CFD trading experience. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman found that FXCM had no regulatory or contractual obligation to close Mr K's positions based on his relocation to a non-UK country, as CFD trading restrictions do not apply to non-UK residents (unlike spread betting). The ombudsman was satisfied that FXCM provided clear and adequate risk warnings about the high-risk nature of CFDs and leverage, particularly given Mr K's stated experience. The appropriateness test was properly conducted based on Mr K's answers indicating substantial experience with CFDs and leveraged trading. The ombudsman rejected allegations of market manipulation as too broad and non-specific, noting that if FXCM engaged in unfair practices the remedy would be to change practices, not provide warnings, and that specific trade execution concerns should be raised separately.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website