Trade Nation Financial UK Ltd · DRN-5795539

The complaint Mr I has complained Trade Nation Financial UK Ltd (‘Trade Nation’) improperly closed his contracts for differences (‘CFDs’) positions without notification and that he was misinformed about what action he could take on his account. Mr I would like compensation for his losses. What happened Mr I had been trading CFDs with Trade Nation since October 2024. In April 2025 it closed 12 of his positions for which Mr I says he didn’t receive the margin calls he should have and the closure of the positions weren’t staggered. He was told his account was in ‘read only’ rather than ‘close only’, the former of which meant he couldn’t maintain the margin on his account. Mr I raised his concerns with Trade Nation that his trades had been closed because of system malfunction. Trade Nation issued its final response to the complaint on 13 May 2025. It said; • Mr I had been made aware of the risk of trading in CFDs. • It was Mr I’s responsibility to ensure there was sufficient margin on his account to support his positions. • It had imposed ‘close only’ on Mr I’s account to prevent him from placing more trades and experiencing distress to his wellbeing. • Close only didn’t prevent Mr I from funding his account to cover margin calls. • Mr I was sufficiently warned about the margin requirements. Unhappy with the outcome, Mr I brought his complaint to the Financial Ombudsman Service. During our investigations Trade Nation made an offer as a gesture of goodwill. Our investigator put the offer to Mr I and said; • He was satisfied two margin call emails were sent and delivered to Mr I’s email and Mr I had logged on to his account twice after that before his positions were closed. • The account was execution only and irrespective of the margin call emails, it was Mr I’s responsibility to keep track of his positions and margin as per the account terms. • Trade Nation was able to close any position once the 50% margin requirement was broken. There was no timescale and Trade Nation didn’t need to take a staggered approach, even if other firms did. • Trade Nation accepted the messages Mr I received about his account being read only and close only were confusing, so it offered to pay the loss of £1,725.30. Mr I hadn’t attempted to deposit any funds or take action so while he contacted Trade Nation he could have done more so was also at fault for the loss. The investigator thought Trade Nation’s offer was fair. Mr I disagreed with the outcome, provided reasons and requested his complaint be reviewed by an ombudsman so it has been passed to me for a decision.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. After doing so, I’ve reached the same conclusion as the investigator and broadly for the same reasons. I’ll explain my reasons for doing so. In making his complaint Mr I has complained that Trade Nation breached some of the Financial Conduct Authority’s Principles, ignored treating customer fairly outcomes and industry standards. The Principles have a wide application and I have therefore considered all of Mr I’s points with the Principles in mind as well as rules and other business requirements as a relevant consideration throughout my decision. Closure of trades As background, with regard to margin Trade Nation’s Client Agreement says; ‘9.5 Details of your current Margin requirement and P&L are available through the Platform. You agree that you are solely responsible for monitoring your Margin requirement, P&L and Account balance. … 9.8 It is your responsibility to ensure you maintain sufficient Margin in your Account at all times. We may, but shall not be under any duty to, contact you in relation to making additional Margin payments (a “Margin Call”). We may make a Margin Call to you at any time and in accordance with Clause 9.1 above. 9.9 If you fail to maintain sufficient Margin, we may, at our absolute discretion, allow you to maintain your open Transactions with us. However, we reserve the right to subsequently close out any open Transactions should you fail to provide sufficient Margin…’ [My emphasis] Trade Nation has provided its ‘Client Margin Autoclose Log Report’. When the account value dropped to below 50% it caused ‘Margin Call: Action Needed’ requirement email alerts to be sent to Mr I. While the 100% and 75% margin warning notifications were sent out as referred to in Trade Nation’s Client Agreement these are provided as a courtesy only as it is the client that is responsible for monitoring their account and ensuring sufficient margin is maintained at all times. Trade Nation’s records show that at 03:10 on 10 April 2025 Mr I was sent a 100% margin alert when his account value dropped to 99.12%. Then at 15:22 he was sent a 75% margin call email as his account value was at 74.99%. Trade Nation’s records show that both emails were delivered but Mr I says he only received the first one. However, the email log information provided by Trade Nation show ‘Info’ data – SMTP (‘Simple Mail Transfer Protocol’) – that both emails were delivered to Mr I’s email address. So, I have no reason to think that only one was delivered and not the other. Trade Nation’s records show Mr I logged into his account via his mobile at 15:52, thirty minutes after the second email was sent – which both parties have said was his normal practice – and again at 18:27, 22:14 and 22:24. But despite being given the opportunity to do so – by dint of Mr I logging into his account – no funds were added so his positions were auto closed starting at 00:53 on 11 April 2025.

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Part of Mr I’s complaint is that when Trade Nation closed his 12 positions it did so within 15 seconds so he couldn’t take any action and that the positions weren’t closed on a risk-based, step-by step approach e.g. closing the open position with the largest loss first that could restore margin and so on. Mr I said this wasn’t in line with Trade Nation’s own policy where ‘some trades may be closed’, was unreasonable and didn’t allow him to take corrective action. And Trade Nation’s website, with reference to ‘margin trading’ said; ‘If this [margin requirement] is not corrected, the broker can choose which of your open trades they want to close, regardless of whether it’s in profit or not.’ [my emphasis] I asked Trade Nation for more information about this. Trade Nation explained this is how its trading platform operates and as the process was automated and executed by the platform, the closure of multiple positions can occur within a very short space of time. The platform doesn’t close positions based on a manual or discretionary risk-based selection such as closing the largest losing position first. Once the margin close out threshold of 50% is reached, the platform automatically begins closing positions in order to reduce the overall exposure and margin requirements as quickly as possible. It is applied automatically and consistently across all its client account. Because Trade Nation’s closures are system driven and occur when the account has already reached the close out level, it isn’t possible for Trade Nation to determine with certainty whether closing positions in a different order would have resulted in any of Mr I’s positions remaining open. I’m persuaded by this and Trade Nation’s further comment that in a fast moving market account equity can change rapidly and so its platform closes positions automatically to bring the account within margin requirements as quickly as possible. Mr I has said the 15 second mass liquidation as merely being contractually permissible. But bearing in mind how high risk and volatile CFDs are and the automated nature of Trade Nation’s systems – which understandably don’t allow for any discretionary or manual intervention – I don’t agree that it did anything wrong in closing his positions as it did. However, I am aware that CFD brokers can close positions on a risk-based, step-by step approach e.g. closing the open position with the largest loss first that could restore margin and so on. Trade Nation’s Client Agreement does refer to such an approach; 9.7 For the MT4 Platform, open position P&L will dictate the order in which open positions are closed in relation to this Clause, with the open position incurring the greatest Loss being closed first. But Mr I didn’t have a MT4 account. He used the ‘TN Trader’ platform so the above wouldn’t apply in his case and the fact that the above only referred to it being applicable to a particular type of account would also imply that the method of closing Mr I hoped for wasn’t available for his TN Account. But even if I am wrong on this point, I can’t agree Trade Nation has done anything wrong in closing Mr I’s positions when margin was breached in line with its Terms. Mr I’s comments don’t take into account fast moving markets and in any event I've not been given any evidence that if Trade Nation were to have taken a step by step approach – which it had no obligation to do – then this would have changed the outcome. In bringing his complaint to this service Mr I says since becoming a client of Trade Nation he consistently responded to margin calls within 30 minutes and had never before experienced

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forced liquidation because of margin call requirements. But in response to the assessment of his complaint, he also said that when he logged onto his account after the margin calls email this could have been routine monitoring and levels may have improved so required no action. I accept what Mr I has said but Trade Nation told us that during this time, market conditions were stable and prices were moving in a normal manner. And in any event I think Mr I’s comment misses the point that it was his responsibility to monitor the margin on his account as detailed in the account terms he agreed to. The Client Agreement makes clear the service being provided was execution only and that Mr I was; ‘…solely responsible for monitoring the status of your Transactions’ and ‘…solely responsible for maintaining sufficient Margin with us.’ It goes onto say; ‘We shall not be under any obligation to notify or inform you of any information in relation to the above.’ And looking at Trade Nation’s website, with reference to ‘margin trading’ it says; ‘Your broker could send a margin call notification when your maintenance margin falls below the required level to keep any trades that might’ve gone against you open.’ [my emphasis] This tallies with Trade Nation’s comment that the margin call notifications is a courtesy only but the above being said, Mr I was sent two margin call notifications so he was put on notice his account value had dropped and action may be needed. While Mr I hasn’t told us this was the case – and accept margin may not have been needed when Mr I logged onto his account – but for CFD trading market volatility is always an issue and account equity may drop rapidly to 50% or below. Mr I had already been alerted twice to his account equity levels, so Trade Nation had sufficiently informed him of the potential that action was needed to maintain his margin. So irrespective of Mr I’s view that Trade Nation had an obligation to provide him with margin requirement notification – which it didn’t have a contractual obligation to do – I’m satisfied it did so on two occasions within a 24-hour period. And Mr I logged on 30 minutes after receipt of the second one – which Mr I has told us was his usual practice – and again 35 minutes after that. This suggests to me that Mr I was aware he was on notice but for whatever reason failed to take action or didn’t need to take any action at the time. But the outcome is that margin was needed – at whatever time – and Mr I failed to provide the additional funds. Mr I has referred to Trade Nation’s ‘admitted system failures’ and that he had been told by a Trade Nation employee that Trade Nation was aware of ‘the flaw with improper auto-closure of all trade positions, instead of industry gradual and selective auto-closure when necessary’ and that it planned to fix it. But in its submission to this service Trade Nation has said that it hadn’t ‘identified any failures in our systems which would have had a detrimental impact on [Mr I’s] trading abilities.’ And from the information presented to me, I’m persuaded that is the case. Overall, I’m persuaded two margin call emails were sent and delivered to Mr I’s email address on 10 April 2025 and Trade Nation wasn’t under any contractual obligation to do so or do more than it did. I’m also satisfied Trade Nation wasn’t being unreasonable in closing

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Mr I’s positions because of margin requirements. So, I don’t uphold this element of Mr I’s complaint Read/close only Mr I raised his formal complaint with Trade Nation on 23 April 2025. In making his complaint Mr I explained the incident, over and above his financial loss, had caused him significant harm including severe anxiety and depression, elevated blood pressure which required monitoring, caused difficulty sleeping and constant rumination over the financial impact and an inability to focus on daily responsibilities. In response to these comments, as a duty of care, Trade Nation put Mr I’s account into read only on 24 April 2025 and at 17:51 it said; ‘This means you can still access your account and review your positions and history but trading and depositing functions have been temporarily disabled. You will be able [t]o close your trades only.’ Mr I challenged this and questioned what would happen in the event of a margin call. Mr I then received three margin call emails (100% and 75%) but was unable to add margin – as per the mail he received – so his final position was closed on 6 May 2025 and Mr I suffered a loss of £1,725.30. Clearly Mr I was told there was a difference between close only and read only. Mr I was misinformed the latter meant he couldn’t take any action on his account. With close only Mr I was able to access his fund to deposit and withdraw but just not add any further trades which would increase the risk. But because Mr I was misinformed he didn’t take any action and suffered a loss, so I think Trade Nation was at fault here and the matter needs to be put right. Putting things right Trade Nation has acknowledged Mr I was misinformed and as a gesture of goodwill it has offered to pay him £1,725.30 in full and final settlement. I agree that is a fair and reasonable outcome and Mr I has told us he wishes to accept the offer but only in settlement of this element of his complaint and not his overall complaint. But Mr I brought his complaint to this service as one complaint and I can’t split it into two for the purposes of his acceptance of one element of it and not the other. For the reasons given I uphold Mr I’s complaint in part. I appreciate Mr I will be disappointed I am not upholding his complaint to the extent that he wants. It’s clear he understandably feels strongly about it and I’d like to thank him for the effort he has made and time spent in bringing it. But I hope I have been able to explain to him how and why I have reached my decision. It is for Mr I to decide whether to accept Trade Nation’s offer of £1,725.30 in full and final settlement of his complaint. My final decision For the reasons given, I partially uphold Mr I’s complaint about Trade Nation Financial UK Ltd.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr I to accept or reject my decision before 22 April 2026. Catherine Langley Ombudsman

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