Membership rules and guidelines
A comprehensive overview of the company's requirements for brokers to obtain and maintain membership status, the Committee's responsibilities, the purpose of the Compensation Fund, what happens after a client files a complaint, and other issues related to the company's existing regulations.
Crypto Oversight Authority operates on a completely independent basis, with the main goal of resolving conflict situations in the financial sphere. As a self-governing company, it does not need to be controlled by third parties or registered as an EDR.
Individuals and entities whose primary activities are in the financial sector are eligible to apply for membership. The rules and principles they must adhere to are established by the company alone.
The following points are primary aims:
- In situations where a client and their financial service provider cannot reach a unanimous resolution to a conflict, provide them with the opportunity to be presented with an alternative position.
- To serve as an independent third party to whom the broker and trader can turn to resolve the dispute.
- To provide comprehensive support to brokers and their clients in ensuring the effective resolution of conflicts.
Complaints received by the company are referred to the Committee for review only in the situations described below:
- A member’s violation of one or more terms of the agreement concluded with the client.
- A member’s failure to comply with one or more service standards generally accepted in the financial sector.
- A member’s conduct that qualifies as discriminatory or otherwise unfair.
When a complaint is filed, the company first verifies whether the broker in question belongs to its network. Complaints concerning non-affiliated brokers are immediately declined, while those involving registered members move forward for detailed review under the established rules.
The review process follows strict timelines, requiring resolution within 10 days. During this window, the broker must provide a complete explanation of the circumstances that gave rise to the complaint.
Should the applicant deem the broker’s reply inadequate, they may escalate the matter by initiating the formal complaint procedure. At that stage, the case is transferred to the Dispute Resolution Committee for an in-depth evaluation.
It is the inherent right of the company to impose certain fees that members of all or some levels are obliged to pay. Information about such obligations is always posted on the company’s website.
Only the Company may appoint members of the Dispute Resolution Committee. The latter undertakes the following obligations:
- Evaluation of the information contained in the complaint consistent with the jurisdiction to which it relates, implementation of the investigative procedure in accordance with the existing rules and considering further directions.
- Making decisions consistent with the results of the process described above.
- Issuing directions for the full implementation of these decisions.
The process described above outlines the Committee’s existing responsibilities. Any changes to this list, whether increasing or decreasing the number of items, may only be made by the Board of Directors.
In order to ensure the continued provision of services and the ability to quickly return to serving customers, members are obliged to have an action plan in place in the event of unforeseen circumstances. This plan enhances the broker’s reputation and guarantees its operational stability. It must include the following:
- specifications for alternative facilities;
- a clearly defined recovery framework;
- contingency measures for potential interruptions caused by external partners;
- scheduled yearly testing to confirm effectiveness;
- established communication procedures with the company;
- up-to-date contact information for outside providers;
- comprehensive instructions for activating emergency connections.
Brokers who apply for membership status are obliged to provide evidence of their work in the financial industry for at least the last 3 years. By establishing this requirement, the company ensures that its members possess the necessary experience and knowledge.
If a broker without the relevant experience still wishes to obtain membership status, it must prove its eligibility by passing a background check. This requires providing references from a senior executive at a financial institution that has been operating in this sector for at least 3 years.
Brokers have access to several membership levels, each with distinct parameters, such as commission size and the number of complaints processed.
Members at all levels agree to provide the company with certain reporting requirements, notifications of which will be posted on the official website.
The company operates on a completely independent basis and is not subject to any outside pressure. Members cannot influence its processes, including decision-making.
The Committee is the party responsible for resolving disputes. It:
- handles all matters related to the consideration of complaints and the rendering of decisions on them;
- submits reports to the Board of Directors as its sole oversight body.
The Dispute Resolution Committee as a whole and its employees in particular are subject to the supervision of the Board of Directors and are under its full control. This also applies to the company and its decisions.
Since the Dispute Resolution Committee and the Board of Directors are completely independent bodies, company representatives cannot serve on them.
The financial resources of the Compensation Fund may not be used for any purpose other than its replenishment and the fulfilment of the company’s operational objectives. Distribution of them among the participants is not permitted.
The company undertakes to contribute a specified amount to the Compensation Fund account, which is opened specifically for this purpose and serves as a potential protection for clients in the event of conflicts with brokers. This account is also replenished monthly with a specified percentage of the membership fees paid by participants.
The Fund sets the maximum compensation size in advance, and it is under no obligation to pay the full amount of damages if it exceeds this maximum. The compensation size is subject to periodic review, and any changes are published on the company’s website.
The specified team has the full right to transfer funds from the Compensation Fund to clients in situations where, following a dispute, a member refuses to comply with the Committee’s decision. Brokers who have lost their membership status cannot claim funds from the Compensation Fund, as they remain in the Company’s possession. In situations where the maximum compensation amount is not sufficient to cover the losses of all Applicants, it is distributed equally among them.
It is the company’s full right to conduct annual audits of members to ensure their compliance with the rules described in this document.
During the implementation of these audits, the company requests that members grant its representatives access to its assets, personnel, and other resources that may be required in the process. In these cases, members must fully cooperate.
From the moment of receiving membership status, a broker recognised as trustworthy undertakes to include in each subsequent contract with the client a mandatory clause regarding the latter’s right to file a complaint if the need arises.