Russian antimonopoly authorities target Yandex over illegal Forex advertising

Maria Nikolova

The advertisement included text like “Forex online” and “binary options”, whereas the company behind the advertised services lacked the necessary license from Russia’s central bank.

Advertising of Forex services in Russia and the involvement of the Federal antimonopoly service (FAS) in the process of monitoring the Forex market are two of the developing matters for the Russian FX industry. Although, when it comes to the regulation of this segment, intervention from the Central Bank of Russia is usually expected, the latest actions against alleged FX rules violations come from FAS.

Today, the Moscow office of FAS announced it has launched a case against Yandex and Process-A over alleged violations of the advertising law. Yandex, which distributed the advertisement in question, and Process-A, which is an advertiser, are alleged to have allowed dissemination of advertising of services that require licenses issued by the Bank of Russia. In addition, the advertisements did not display the full name of the provider of the services.

The actions undertaken by FAS are in response to a complaint filed by the Association of Forex dealers, a Forex self-regulatory organization. The complaint notes that in March 2017, the “Yandex.Direct” system showed ads by an entity that was not licensed by the Bank of Russia to offer derivatives and/or Forex services. However, the advertisement was displaying text like “Forex online” and “binary options”.

The trial is set for September 14, 2017.

In its announcement, FAS notes that advertising of services that require licenses by entities that do not have such licenses is forbidden.

Under the Forex law, which Russia’s president Vladimir Putin signed in the end of 2014, only licensed Forex dealers can advertise their FX services to Russian clientele. In the face of the law requirements, many non-licensed companies, especially ones based offshore continue to target Russian clients. One way to tackle the activities of such entities is to block their websites.

In July this year, 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 concerns the reasons for including domain names and website addresses in a 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.

One of the proposed amendments envisages that the Bank of Russia may decide whether to include a website in the registry, if 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.

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