Bank of Russia mulls requirements for websites of overseas FX brokers

Maria Nikolova

As the novel FX law seems not to affect the activity of overseas FX brokers, the Bank of Russia considers requirements towards their Russian websites.

The Russian Forex sector got officially regulated in December 2014, when president Vladimir Putin signed the profile law. The law obliges Forex companies that are willing to provide their services to Russian clients to establish a business in Russia and to obtain a license of a Forex dealer.

Many of the requirements set by the new law, however, such as the relatively high net capital requirement of RUB 100 million (USD 1.74 million/EUR 1.63 million), have pushed some FX brokers to seek alternative solutions. Let’s note that only six companies have thus far obtained the coveted Russian FX dealer licenses – Alpari Forex, VTB 24 Forex, Teletrade Group, TrustForex, Finam Forex, Forex Club.

What about the others? They have either left the Russian market, that is, stopped servicing Russian clientele and closed their branches in the country, or continued to offer services to Russian clientele from other jurisdictions.

Last year, the Bank of Russia received 210 client complaints against Forex companies registered overseas. This is slightly down from the 236 complaints received in 2015.

The Russian “Megaregulator” is now considering establishing requirements for the websites of foreign FX companies targeting Russian clients, according to Russian newspaper “Kommersant”, quoting Vladimir Chistyukhin, Deputy Governor of the Bank of Russia.

Mr Chistyukhin notes that the goal of the Bank of Russia is to protect the Russian customers from non-disclosure of information and fraudulent activities of Forex companies. Regarding overseas businesses, however, the powers of the regulator are limited, given that the Russian laws do not apply outside of the Russian Federation. “Now, we can only block websites in case their content is not compliant with the law”, he said.

Mr Chistyukhin suggests the implementation of requirements towards websites of foreign FX companies – these rules should concern information disclosure and protection of consumer rights. Of course, this effort is impossible without any support from and co-operation with foreign authorities.

In the meantime, the Forex industry within Russia continues to battle with the bureaucratic burden that prevents it from commencing normal activities. The last bureaucratic hurdle to clear is drafting and implementing the common standards for Forex dealers. A special committee at Russia’s “Megaregulator” is holding meetings regarding these standards, with the relevant project having already been amended several times.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<