Insights for consumers
If you are trading online, it is important to read the terms of use carefully, including clauses about system availability and rejected orders, and consider having alternative trading arrangements in place. You are unlikely to be entitled to compensation for missed opportunities to make a profit if the provider acted within its agreement with you and the law.
Peter’s overseas future trades are rejected
Peter* used a platform provider to access trading in overseas futures markets — meaning he was buying or selling contracts for products (like gold, oil, etc) located in another country.
Peter tried to place a trade to open a short position in a futures contract — meaning he was selling a contract with the intention of buying it back later at a lower price to make a profit.
Peter submitted three market orders within a short period. Each order was rejected almost immediately, and he was notified. Peter believed the orders failed due to a system issue and that the platform provider was obliged to ensure orders were executed properly, even during a system outage.
Peter believes he missed out on profit
After reviewing the market movement later that day, Peter believed the trade would have been profitable if it had gone through. Peter calculated he lost $695 in profits and asked the platform provider to pay him this amount for his missed opportunity.
Platform provider denies responsibility, referring to their service agreement
The platform provider explained that the problem was not with their systems, but with a brief disconnection affecting the broker they used to execute the trades. This meant that no order was accepted, and no position was opened.
The platform provider said they were entitled to rely on underlying agents to execute trades. Their client agreement also allowed them to reject orders, and they did not guarantee continuous system availability. They said Peter’s orders were rejected because of the temporary outage and that Peter was notified of the rejection at the time. He could have placed another order after receiving that rejection notice.
Peter remained dissatisfied with this explanation and believed the platform provider should take responsibility for the failure to execute the trade and compensate him. Peter complained to FSCL.
FSCL’s findings on missed profit claims
We reviewed all the information provided by both parties, including the platform provider’s client service agreement and details of the service interruption.
The agreement made it clear that the platform provider could reject orders at their discretion and use other brokers to execute trades. The terms stated that the provider did not guarantee uninterrupted system access, warning that trading systems can be disrupted and that customers should have alternative trading arrangements.
Our investigation showed that the orders were never accepted or placed on the market. The issue arose from a brief disconnection affecting the executing broker’s trading channel, which Peter was notified of at the time. The claimed loss was a missed opportunity rather than an actual loss.
We did not consider it fair to require the platform provider to compensate Peter for the profit he would have made if the trades had been placed.
