Russian c-bank: Complaints about FX dealers account for 4.9% of total in first 9 months of 2019

Maria Nikolova

Overall, the number of complaints about professional financial market participants has decreased from a year earlier, data provided by the Russian central bank show.

The Central Bank of Russia has earlier today published data about the complaints it received during the first nine months of 2019.

During the January-September 2019, the regulator received a total of 182,500 complaints from customers of financial services providers. This is down by 4.2% from the equivalent period a year ago.

The number of complaints about professional financial market participants – a group which includes Forex dealers (the official designation of OTC FX firms in Russia), also fell. It amounted to humble 700 in the first nine months of 2019, down 29.1% from the corresponding period in 2018.

The companies that got most complaints were brokers and auction organizers – a pattern we have already noticed. Complaints about FX dealers accounted for 4.9% of all complaints about professional financial market participants in the first nine months of 2019. This is up from 1.5% a year earlier.

The small number of complaints about Russian Forex dealers, however, is not an indicator of the health of the Russian Forex industry. Especially as the number of entities offering Forex services in Russia without a license remains substantial.

In October 2019, Russia’s Federal Financial Monitoring Service published a warning about a number of foreign entities that illegally offer online trading services to Russian investors.

These entities, according to the regulator, abuse the insufficient knowledge of Russians about the securities market regulation, and solicit investments into activities such as Forex trading. Typically, the fraudsters create a facade that the deposit of investors are increasing thanks to gains and demand additional investments. Then, any attempt by the clients to withdraw their money, the balance suddenly becomes “zero” and the firm stops communicating with its clients.

According to the regulator, the companies that most often engage in such fraudulent activities with regard to the Russian market are: «Teletrade», «GRANDCAPITAL», «Delloy Trаde», «GLOBAL FX», «Kappabrokers», «GO CAPITALS FX», «KBCapitals»; «10 BROKERS»; «Swis Trade»; «BORN to TRADE», «Barclays Trade», «WerCrypto».

All of these companies are non-Russian entities and do not have the requisite licenses nor are they members of self-regulatory organizations.

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