Hi Anand,
Before I begin you should know that you only have the ability to seek compensation if you lodge an official complaint with IC Markets. To date I have requested you do this four times, however, you have not done so.
IC Markets has acknowledged to yourself and other effected clients that we did experience a technical issue during the NFP/ECB announcement on July 3rd. A technology provider who we use for aggregation and order matching, ‘Integral’, experienced a load issue which caused orders to reject. When this occurred the pricing from Integral remained online as did the MT4 server. because of this we have full transparency of prices and clients actions throughout the announcement.
As a gesture of good faith we have been honoring clients stop loss and take profit orders. This has been done on a case by case basis and the majority of clients who have sought compensation have already been dealt with and reimbursed.
We have not honored entry orders whether they are winners or losers. It is important to understand that forex brokers have the ability to reject a trade, to refuse to deal, to not quote a price and so on. Whilst this is completely against the IC Markets business model and the image we’ve spent so long building, it is actually a necessity in order to remain a ‘True ECN’ broker.
Why?
In a nutshell, IC Markets doesn’t like risk. We sleep well at night knowing that the position that we hold with our prime broker matches exactly what our clients have in our trading platforms. I.e. if IC Markets clients are net long EURUSD 10M then we will also be net long 10M EURUSD with our prime broker. This means IC Markets doesn’t have risk and this is the way we like it!
Every trade executed in MT4 is first executed in the underlying market with one of our liquidity providers (LPs). IC Markets cannot and will not execute a trade in MT4 (or cTrader) unless it has been confirmed by an LP first. If we execute a trade in MT4 that hasn’t been executed by an LP then we have risk (which we don’t like).
In the case of the NFP/ECB announcement on the 3rd, trades weren’t able to be executed with the LPs so they rejected in MT4 and clients trying to trade likely saw the ‘off quotes’ message in their terminals.
So, if we can’t execute a trade with our LPs (for whatever reason) then we do not execute trades in MT4.
Clients with open trades during such circumstances have ‘risk’. These clients are our priority as we appreciate that risk is bad so we want to help them… we can close positions over the phone and will also seek to compensate them after the fact once all the dust has settled..
Anand, since you were trying to execute new trades we are not providing compensation. As above, we will not execute your trades in MT4 if we can’t execute them in the underlying market first. To do otherwise would go against our business model and effectively make us a market maker. Our stance with this is consistent with forex brokers, prime brokers, liquidity providers and technology vendors globally.
Kind regards,
Angus Walker | Head of Trading Desk | IC Markets