The Hong Kong Securities in addition to Futures Commission (SFC) has fined FXCM Asia Limited (HK FXCM) HK$4 1000000 for asymmetric slippage of customers' FX orders betwixt Dec 2006 in addition to Dec 2010.
An investigation yesteryear the SFC institute that HK FXCM netted US$1.4 1000000 inwards profits over a four-year stream from unfairly executing customers’ forex trades.
“During the Relevant Period, a full of US$1,452,926.69 Positive Slippage was retained yesteryear the FXCM Group including HK FXCM.“
According to the Statement of
Disciplinary Action, HK FXCM operated a no dealing desk (NDD) model, however, when the theater executed FX trades on behalf of clients amongst external liquidity providers, “FXCM Group including HK FXCM kept the Positive Slippage which is the departure betwixt the master copy requested cost in addition to the improve price,” says the SFC.
But inwards the cases where orders had a worse cost when executed amongst an external liquidity provider, HK FXCM passed the losses straight to their clients:
“The Negative Slippage which is the departure betwixt the worse cost in addition to the master copy requested cost was bore yesteryear the client.”
While the SFC acknowledged that HK FXCM co-operated amongst the investigation, the theater likewise admitted that asymmetric slippage was taking house in addition to agreed to reimburse all affected clients.
The SFC press unloose states that 3,739 accounts were affected in addition to that victims volition hold out receiving a credit inside thirty days.
This isn’t the root fourth dimension FXCM has been hitting amongst penalties relating to unfair social club execution. In Feb of 2014, FXCM United Kingdom of Great Britain in addition to Northern Ireland of Britain in addition to Northern Republic of Ireland had to coughing upwardly US$16.9 1000000 - $6.9 1000000 inwards fines in addition to $10 1000000 inwards restitution to clients - when it was fined yesteryear the
UK Financial Conduct Authority for the exact same asymmetric slippage practice.
And inwards August of 2011, the National Futures Association inwards the U.S.
levied a $2 1000000 penalty on FXCM for asymmetric slippage, amid other violations.
HK FXCM was sold to
Rakuten Securities Inc., a Japanese fiscal services company, inwards September of 2015 in addition to HK FXCM was re-branded to Rakuten Securities Hong Kong Limited inwards April, 2016.