Estonian regulators fined Admiral Markets AS 32,000 euros

Photo: Wikifx

The Estonian Financial Supervisory Authority (locally known as Finantsinspektsioon) fined Admiral Markets AS (a locally registered entity of the Admiral Markets Group) 32,000 euros.

The fine announced on Tuesday was due to the broker’s handling of the negative oil price crisis that shocked the derivatives market last year.

In Apr 2020, the price of West Texas Intermediate (WTI), the US oil benchmark, entered a negative zone. For such a disaster, no trading platform is ready. Due to technical defects, many brokers stopped providing crude oil futures trading services.

Brokers should be transparent to clients

Estonian regulators stated in detail that Admiral Markets has made major changes to the terms of its financial instruments without prior notice to customers. In particular, the broker changed the method of calculating the current price of crude oil. In addition, the company has increased the cost of holding certain securities overnight.

Regulators believe that platforms that provide complex financial investment tools should communicate clearly with customers before providing services. In the case of Admiral Markets AS, the regulator believed that these changes were not in the interests of customers.

"The process and reasons for the change are not transparent to the customer," the regulator said (translated from Estonian). As a result, customers who have acquired financial instruments have to restructure their businesses, including taking into account potential revenue and/or cost losses. "

Earlier this month, "Financial Giant" reported that Admiral markets stopped commission-free services for certain CFDs on stocks and ETFs. In addition, the platform also prohibits the trading of high-risk penny stocks.

Reprinted from Wikifx, the copyright all reserved by the original author.