EVENTS LEADING UP TO THE SPECIAL ADMINISTRATION
LQD Markets Limited (The "Company") became authorised and regulated by the Financial Conduct Authority ("FCA") on 22 May 2014. The Company director is Nicolaos Hjalmar Bang (the "Director").
The Company provided brokerage services (Forex and CFDs) to individual and corporate clients through its MetaTrader 4 platform,
On Thursday 15 January 2015, the Swiss National Bank ("SNB") removed the informal peg that tied the Swiss Franc to the Euro, at around 1.20 Swiss Francs.
The Company operated as a Match Principal Broker which meant that when clients placed trades on the MT4 Platform, the
Company then went and physically placed these trades with their Prime Broker at a slightly better price which allowed it to make a margin on
each of the trades placed by clients. On hearing the Swiss Franc news, clients requested that EURCHF was either bought or sold (depending on their positions held) at a price of 1.540 per point, however these trades were not completed, as banks stopped offering a market for 17 minutes, which meant that the Company could not match the trade in its usual manner.
When banks re-opened their markets on the EURCHF they were doing so at a price of 0.82 per point, which was the lowest point in the market. Due to the match principal that the Company operated it was forced to book the trades initially placed. This resulted in clients faling into negative equity with the Company and the Company also falling into negative equity with its prime broker.
