Not upheld: Margin call handling and proportionality of account closure following margin requirement breach complaint against Saxo Capital Markets UK Ltd

Decision detail

Summary

Mr G complained that Saxo Capital Markets UK Ltd mishandled a margin call on his CFD trading account by closing all his positions, including a non-margin position, when his margin utilisation exceeded 100% on 7 April 2025. Mr G believed this was disproportionate and that Saxo should have closed only enough positions to bring the account back below 100% margin utilisation. Saxo defended their actions as being in accordance with their terms and conditions, which permitted them to close any and all margin positions without notice upon margin requirement breach. The Ombudsman found that Saxo's terms were sufficiently clear, multiple warnings were provided, and the decision to close all leveraged positions was proportionate and aimed at preventing further loss in a volatile leveraged trading environment. The complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman found that Saxo's terms and conditions clearly placed responsibility on the consumer to maintain margin compliance and explicitly permitted Saxo to close any and all positions without notice if the margin requirement was breached. The margin breach at 01:10 on 7 April 2025 triggered Saxo's contractual right to act immediately. The Ombudsman rejected the argument that Saxo should have closed only some positions to keep the account just below 100% margin utilisation, as this would have left the account exposed to further market volatility and could have caused additional breaches. The decision to close all leveraged positions was proportionate, decisive, and aimed at preventing further loss. The non-margin position was closed due to Mr G's own account value protection limit being breached, not as part of the margin stop-out. Multiple warnings were provided to Mr G, and the terms were sufficiently clear. The Ombudsman found that fairness does not require a firm to assume additional risk by delaying a stop-out once an account has moved into deficit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website