FinComm Awards 36% More Compensations to Forex Traders in Q3 2022

Total compensations awarded to forex traders by the Financial Commission (FinComm), an independent external dispute resolution (EDR) body for the forex industry, jumped 36% to $79,494 at the end of the third quarter (Q3) of 2022.

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The number of complaints resolved by the body also jumped 4% quarter-over-quarter (QoQ) from the 781 complaints resolved during the second quarter.

Of the new complaints, the ones valued between $1000 and $10,000 increased by 25%, FinComm said.

The worlds first forex industry-focused EDR body disclosed these figures on Tuesday in its key metrics for Q3 2022.

According to FinComm, complaints filed by disgruntled forex traders increased 5% to 809 complaints during the period.

The self-regulatory organization added that compensation sought from all brokers surged 51% to $3.4 million, even as the average complaint value climbed 45% to $4,266.

However, FinComm said trading-related complaints only accounted for 95 or 11.7% of all complaints received during the quarter.

On the contrary, non-trading related complaints (430 in total) accounted for the majority or 53.2% of complaints, while finance-related complaints trailed behind with 284 complaints or 11.7%.

Most of these complaints were majorly on account blockage and funds withdrawal, followed by complaints on price check and stop out.

Other complaints centered on agreement breach, unauthorized access, advising service, and bonus policy, FinComm said.

Additionally, the EDR body noted that complaints ruled in favour of traders jumped 57% QoQ while the average resolution time improved to 4.6 days.

Crypto Volatility and Forex Trading

According to CryptoCompare, a global cryptocurrency market data provider, volatility across cryptocurrency markets worsened in July and further slipped away from the high levels reached in May.

FinComm believes that weak cryptocurrency prices among investors and renewed focus on forex and derivatives trading influenced several of its key metrics in the recent quarter.

“Renewed growth in filed and resolved complaints, as well as compensation sought suggest traders may be taking advantage of price volatility on traditional markets in light of the negative impact of such asset classes on digital currencies,” FinComm explained.

Meanwhile, FinComm on Friday admitted Vantage as an approved forex and contracts for difference broker member of its self-regulatory organization.

In late September, the EDR body also added TMGM to the list of over 40 forex and CFD brokers under the member-driven organization.