Decline in Complaints- Derivatives & Forex Dealer- AFCA Report

AFCA latest report shows a substantial decrease in complaints against derivatives & forex dealers, contrasting with rise, overall grievances.

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Sharp Decrease in Complaints Against Derivatives and Forex Dealers by AFCA (report) Amid Rising Overall GrievancesThe Australian Financial Complaints Authority (AFCA) has recently released its latest data. This reveals a decline in the number of complaints against derivatives and foreign exchange dealers for the fiscal year ending on June 30, 2023. However, this reduction comes in the backdrop of an overall increase in the number of complaints across various sectors.

The data shows that the total number of complaints registered with AFCA surged from 69,785 to 92,915 in the past year. This indicates a rise in grievances. Notably, the complaints against derivatives and forex dealers saw a contrasting trend.

Derivatives dealers in Australia received a total of 197 complaints in the latest fiscal year. This marked a substantial drop from the 418 complaints in the preceding period. Similarly, complaints against forex dealers decreased to 93 from 622, demonstrating a significant decline in this sector.

Decline in Complaints- AFCA Report

This significant decrease can be attributed to the 543 complaints filed against Union Standard International Group during the fiscal year 2022. Notably, Union Standard International Group has entered liquidation since then, contributing to the decline in complaints.

Among derivatives dealers, the Australian branch of FTX, currently under administration, recorded the highest number of complaints for the fiscal year 2023, with a total of 65. It was closely followed by IC Markets with 32 complaints and a subsidiary of IG with 16 complaints. The Australian divisions of CMC Markets and Plus500 each received 14 complaints. Importantly, while FTX did not address any of the lodged complaints against it. Other prominent derivatives dealers with double-digit grievances managed to resolve some of the issues, albeit in single digits.

Shifting the focus to forex dealers in Australia, OzForex received the highest number of complaints, totaling 30. Meanwhile, two subsidiaries of HIFX registered 20 and 10 complaints, respectively. The Australian subsidiary of Vantage reported nine complaints, and none of these have been resolved. It’s noteworthy that the overall resolution rate across all sectors stands at 52 percent. However, this figure drops to 19 percent for derivative dealers and 39 percent for forex dealers.

AFCA highlighted, “The amount of time that the financial firm has to respond depends on the type of complaint and what’s happened previously, including whether the financial firm has had an opportunity to complete its internal dispute resolution process.”

In summary, while overall complaints to AFCA have surged, the complaints against derivatives and forex dealers have notably declined. This shift in complaint trends indicates the changing landscape of financial disputes in Australia.

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