Complaints about Forex brokers account for 2% of total in October 2018, Russian c-bank estimates

Maria Nikolova

This compares to a negligible percentage in September and August, according to data from the Russian Central Bank.

Complaints about Russian Forex dealers (the official designation of Forex brokers in Russia) accounted for 2% of all complaints regarding securities market participants in October 2018, according to the latest data provided by the Central Bank of Russia. Although the percentage appears rather small, let’s note that it was negligible in September and August.

The biggest proportion of complaints – 32%, concerned companies without licenses to operate in the Russian securities market.

Overall, the Central Bank of Russia received 20,800 enquiries from financial services customers in October 2018. This includes complaints, suggestions, and general questions. This is up from 16,900 such enquiries received in September 2018.

Let’s recall that, in the face of the existing Forex law in Russia, the number of illicit FX schemes is substantial. The Central Bank of Russia identified 208 illegal Forex brokers in the first half of 2018, according to Valery Lyakh, Head of the Bank of Russia’s Department for Countering Malpractice. The list of these 208 entities includes foreign Forex brokers that illegally target Russian clients, as well as Russia-based companies which operate without the necessary FX dealer licenses, as required by the Russian law.

There are only eight companies that are currently licensed to operate as FX dealers in Russia. The small number is partially explained by the tough requirements for obtaining a license from the central bank. Another reason is the lack of a simplified procedure for client identification. The bill proposing such a simplified procedure, however, was withdrawn by its authors earlier this month. The Central Bank said that the proposal was premature, whereas the Government’s objections centred around AML requirements.

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