Estonian Regulator Fines Admiral Markets AS €32,000

Estonia financial regulator, the Finantsinspektsioon, has fined Admiral Markets AS €32,000 after finding a lack of clarity on the broker's changing terms.

February 9, 2021 | AtoZ Markets – The Estonian Financial Supervision Authority, otherwise known as the Finantsinspektsioon published today a message that it has imposed a fine of €32,000 on its supervised forex broker Admiral Markets AS for breach of obligations to clients.

Why Estonian Finantsinspektsioon Fined Admiral Markets AS?

As the regulator notes, in April last year, the investment company Admiral Markets, unilaterally and without prior notice, significantly changed the conditions of financial instruments offered to clients. That is, the methodology for calculating the current price of crude oil was changed, and at the same time, for a certain instrument, the commission for carrying over a position to the next day (the so-called SWAP) was increased.

Kilvar Kessler, Chairman of the Board of the Financial Supervision Authority, explained that a professional market participant who trades in complex financial instruments, offering appropriate services to a wide range of users, must manage and hedge risks and bear the corresponding responsibility. Such a company should also be as transparent as possible in relation to customers even before providing services.

“Just refrain from unexpected and vague shifting of risk to customers,” said Kessler.

As a reminder, in April 2020, OTC market participants, taught by the bitter experience of black swans and Mondays, were forced to take emergency measures aimed at limiting trading in oil instruments amid the extraordinary volatility and market shocks caused by the coronavirus crisis.

After the price of futures for West Texas Intermediate (WTI) with the execution on Tuesday, April 21, fell below zero, Brent price dropped by almost 20% over the day, below the unprecedented level of $20 per barrel.

Then, against the backdrop of a sharp collapse in oil prices, some forex brokers informed their clients that the swap for oil contracts increased due to the difficult situation in the market, and oil trading became available only at the end of the trading session.

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