New rules for Russian FX dealers to come into effect on April 1, 2019
The new rules, which are approved by the Central Bank of Russia, aim to protect clients of the Forex dealers.
The Association of Forex dealers, which represents the Forex industry in Russia, reminds its members and the public that a raft of new requirements for Russian FX dealers are set to become effective on April 1, 2019.
These new requirements, also known as the Basic Standard, were approved by the Central Bank of Russia on January 10, 2019. The requirements that will get into force on April 1, 2019, govern the provision of information by Forex dealers to their clients.
A Forex dealer will have to publish on its website about its name (full name and abbreviations, if any), membership in a self-regulatory organization, who its agents are, as well as its policy for paying compensations in case of bankruptcy. Forex dealers will also have to provide information about how a client may complain.
The new standards stress the importance of informing customers about the risks associated with entering into a contract, including the risks of losses or expenses related to meeting contract obligations. All the information has to be made clear for all types of clients, even for ones without any special knowledge of financial markets.
Forex dealers will not have to use any illicit practices, such as unfounded widening of spreads when the market situation does not necessitate such a change.
Furthermore, the basic standards include requirements for the timing of reviewing of complaints by clients of the companies. Specifically, a Forex dealer has to review a complaint within 15 days after its receipt. This period may be extended to 30 days in case the matter needs extra scrutiny.
The basic standards are obligatory for all Forex dealers and for their agents. In case an agent is noncompliant with these standards, the respective FX dealer will be responsible for the rule breach.
The Central Bank of Russia published the basic standards shortly after it announced the annulment of the Forex dealer licenses of five companies – Forex Club, Alpari Forex, Trustforex, Fix Trade, and TeleTrade Group. The licenses were taken away due to violations of the Russian law by the brokers.