On the complaints lodged by 822 bank customers on 17 March this year relating to compulsory squaring of open position under margined FX contracts, the Monetary Authority of Macao (AMCM) has rolled out a series of investigations according to current policy statement in handling complaints (http://www.amcm.gov.mo/pledge/cPledge.htm). We have conducted 5 meetings with all the complainants with a view to hearing their complaints and reporting interim progress. AMCM has completed the initial investigation and will proceed to more detailed investigations on a case-by-case basis. Our initial findings are as follows: 1. The bank involved squared the open positions in accordance with the related provisions of the margined FX transaction contracts executed between the bank and its clients. The complainants executed the relevant contracts at the time when an account for margined FX trading was established, which included a clause whereby the bank was authorized to square any open FX positions unilaterally. 2. Discrepancies were identified in the notifications to clients in respect of the time of position squaring and actual time when the action took place. In this connection, AMCM has requested the bank to rectify, whilst the bank has issued written elucidations to customers in this respect between 24 March and 26 May. 3. The complaints mainly involved disputes over the compulsory squaring clause in the margin FX trading contract and the service hours of the bank. Such issues are contractual in nature, which are beyond the authority of AMCM. As at 30 May, AMCM received 201 complaints relating to the incident, involving 1119 FX transactions. AMCM will pursue closely each and every individual case and will not fail to notify the results in writing to each complainant. Again, AMCM would like to remind the general public that the FX market is highly volatile and tumultuous. There are high risks involved. Extra prudence should be exercised in FX investments and margined FX tradings.
