Financial Commission Increases Liability Limits of Its Compensation Fund

The Financial Commission, the leading self-regulatory association ‎dedicated to ‎ensuring sound practices across the financial services industry, ‎has substantially ‎increased the maximum amount assured under its Compensation Fund.‎

The decision, which takes effect on April 9, will benefit clients of the ‎Commission’s contributing members, which include international online ‎brokerages ‎that participate in global foreign exchange ‎‎(Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term), derivatives and ‎cryptocurrency markets.‎

Specifically, the Compensation Fund will increase its maximum ‎coverage amount ‎to 20,000 euro ($24,500) per client of an A-Category Member. For ‎the claims sought by clients of a B-Category Member‎, the maximum amount ‎recoverable by a claimant was hiked to 5,000 euro ($6,119). This ‎represents an increase of over 20 percent in US dollar terms.‎

The release noted that the FinaCom paid more than $1.5 ‎million to beneficiaries in 2017. This is compared to the $157,326 awarded to broker ‎member clients in 2016, a nearly tenfold rise on a year-over-year ‎basis.‎

The Compensation Fund primarily exists as an insurance policy to protect ‎members’ clients. The fund’s assets are financed through allocating 10 percent of the monthly membership fees and are held in a ‎separate bank account. Traders of a company with the ‎membership ‎are eligible for compensation only if a member ‎broker refuses to adhere to a judgment from the Financial ‎Commission.‎

Supported by the Dispute Resolution Committee (DRC), ‎which is comprised of recognized industry professionals, ‎the Financial Commission is an external dispute resolution organization with the aim of resolving trader-broker ‎conflicts. The FinaCom’s system helps facilitate a more ‎streamlined and easy resolution process than other ‎alternatives offered via typical regulatory channels such as ‎arbitration or local courts.

In addition to providing dispute resolution and certification services to the participants of the traditional financial markets, Financial Commission recently extended its coverage to the crypto community and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term startups seeking to launch initial coin offerings (ICOs).