Russian c-bank approves basic standards for Forex dealers
The new rules require Russian FX dealers to publish detailed information about their activities and the risks associated with their services.
Russian Forex dealers (aka Forex brokers) will have more rules to comply with. The basic standards have been drafted by the Association of Forex Dealers and have been approved by the Russian Central Bank.
The new rules concern, inter alia, provision of information. 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 new requirements concerning provision of information will apply with effect from April 1, 2019. The new rules for representatives (agents) of FX dealers, as well as the requirements for FX dealer staff will get into effect on December 1, 2019.
The publication of the basic standards happens about a fortnight after the Central Bank of Russia announced the withdrawal of the Forex dealer licenses of five companies – Forex Club, Alpari Forex, Trustforex, Fix Trade, and TeleTrade Group. The licenses are taken away due to violations of the Russian law by the brokers.
