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Complaints about Forex dealers account for 9% of total in Q1 2019, Russian c-bank estimates

Maria Nikolova

Brokers and auction organizers triggered most complaints about financial market participants in the first quarter of 2019, according to the Central Bank of Russia.

The Central Bank of Russia has earlier today posted some stats about the processing of complaints in the first three months of 2019. During the first quarter of 2019, the central bank received 69,600 complaints about clients of financial services providers, a number which is 2.2% higher than in the corresponding period a year earlier. The main reasons for the rise include an increase in the number of complaints about credit providers. 

Regarding the enquiries concerning financial market participants, a group which includes Forex dealers (the official designation for OTC FX firms in Russia), the number of complaints regarding such entities was not significant in the first quarter of 2019. These amounted to humble 370 complaints. Of the total, complaints about Forex dealers accounted for 9%. Complaints about brokers and auction organizers generated most of the complaints.

The small number of complaints about Russian FX dealers, however, may hardly be seen as an indicator of the health of the Russian Forex industry. Especially as the number of entities offering Forex services in Russia without a license remains substantial. Let’s recall that, in March this year, the Russian Association of Forex Dealers, a self-regulatory organization for the FX industry in Russia, has detected a number of illegal Forex entities operating from the “Moscow City” finance center.

Several months ago, the Central Bank of Russia annulled the Forex dealer licenses of five companies, including local majors like Alpari Forex LLC and Forex Club LLC, over repeated violations of the Russian securities law. Shortly after that the Association of Forex dealers terminated the membership of five companies: Alpari Forex, Forex Club, TeleTrade, Fix Trade and TrustForex.

Russian information agency TASS has reported that the activities of the five companies that were slammed by the Central Bank of Russia were focused on aggressive advertising and withdrawing Russian clients to foreign jurisdictions. This explanation has been provided by Larisa Selyutina, Head of the Securities Market and Commodity Market Department.

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