BCS-Forex secures FX dealer license in Russia
The Central Bank of Russia today posted a brief notice on its website announcing that it has granted its Forex dealer license to BrokerCreditService – Forex (Moscow), trading as BCS-Forex.
BCS-Forex joins a handful of FX brokers operating in Russia’s market, mostly part of larger banking groups. BCS Forex is the retail brand of BCS Financial Group, a brokerage company that appeared on the FX market back in 2004.
The Bank of Russia eliminated competition from the entire forex market in the country after it decided to strip several brokerage firms of their license to trade in forex. Most of the foreign exchange dealers operating in the country saw their licenses revoked over the last four years. The list includes Alpari Forex, Forex Club, Fix Trade, Trustforex and Teletrade Group.
The official reason behind the move was that brokers had been using aggressive advertising tactics to lure Russian clients, providing false accounting data, mishandling risks and moving clients’ money offshore, among other violations.
However, this move effectively eliminated forex traders from the retail market and put the business into the hands of local big banks.
More broadly, the Russian Central Bank says that fewer Russians are now involved in illegal financial schemes. At the same time, the regulator has seen a notable increase in opening trading accounts with legal providers, for example, on domestic exchanges.
As a result, Russian financial regulators said they observed a continued downturn in complaints filed by customers regarding Forex dealers that provide licensed OTC FX services to local residents.
It would be quite the understatement to say Russian investors’ interest in speculative products has been unwinding as a result of stringent FX regulations and the RCB’s efforts to limit the marketing of such products. A more accurate description for this drop in complaints would be something closer to the idea that long-standing clampdown is pushing traders away from licensed brokers in Russia to open accounts in offshore jurisdictions.
Russia’s central bank has already spotted a notable increase in solicitations from unregulated brokers and specifically warned the public from doing business with forex platforms that promise an income stream during the Covid-19 lockdown.