Russia gets closer to blocking foreign Forex brokers’ websites

Maria Nikolova

Consultation opens on a new bill that aims to outlaw websites of financial services companies that illegally target Russian clients.

As FinanceFeeds has earlier reported, the Russian regulators are slowly moving towards tackling the activities of financial services companies, including Forex brokers that target Russian clients without having the necessary regulatory permission.

On Thursday, an important step was made in this respect, as the Ministry of Сommunications and Mass Media published a bill that proposes amendments to the Law “On Information, Information Technologies and Information Protection”.

The amendment of interest to us is the one concerning the reasons for including domain names and website addresses in the special registry of online resources that contain information whose dissemination is prohibited in the Russian Federation. Once a domain name and/or a website address are included in the registry, the access to them is blocked by the Russian authorities.

Under one of the proposed amendments, the Bank of Russia may decide whether to include a website in the registry, in case the regulator determines that the information provided from a given website is related to the provision of financial services in Russia by an entity that has no permission to do so.

The proposal is set to affect Forex brokers too, as the large majority of Forex companies that target Russian clientele do so online, without having the necessary Forex dealer license issued by the Bank of Russia. Thus far, only eight companies have secured such licenses and there seems to be little competition in the Russian FX market.

The Ministry of Сommunications and Mass Media has opened a public consultation into the bill. Comments are accepted until August 9, 2017.

Meanwhile, education centers that are allowed to provide training in general but do not have the permission to offer Forex services, including FX education services, have become the latest target of Russian regulators. Andrey Kashevarov, deputy head of the Federal Antimonopoly Service (FAS), has noted the emergence of organizations that offer Forex training services, collect significant sums of money from people and often act as “umbrellas” for foreign FX companies. Mr Kashevarov said that the regulator will go after such centers, as their offering may be considered as Forex advertising and, therefore, requires a Forex dealer license.

FAS may turn to the Ministry of Education and Science to withdraw the permissions of education centers that illegally offer Forex training services.

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