Russian c-bank files complaint against ads of Instaforex
The Central Bank of Russia is displeased with Instaforex’s ads on Yandex.Direct that state “Instaforex – Licensed by the Central Bank of Russia – Open a demo account – Trade for free and without any risk”.
The Moscow office of the Federal Antimonopoly Service (FAS) has confirmed that it had received a complaint by the Central Bank of Russia against advertising of services of a Forex dealer (the official designation of Forex brokers in Russia) via Yandex.Direct.
In a press release, published earlier today, FAS explains that the complaint targets an advertisement stating “Instaforex – Licensed by the Central Bank of Russia – Open a demo account – Trade for free and without any risk”.
FAS notes that the Russian laws prohibit advertising of products whose creation or realization requires licenses or special permissions, in case these licenses and permissions are not present. FAS has found out that Instaforex does not have Russian Forex dealer license and is not a member of a financial self-regulatory organization for Forex dealers. This is in violation of the Russian advertising laws.
In addition, the advertisements of Forex dealers must include a disclaimer stating: “The proposed contracts and products are high-risk ones and may lead to the loss of all the invested funds. Before investing, get to know the risks.” The lack of this statement in the ad, as well as on the webpage to which the ad redirected, is also in violation of the Russian advertising laws.
In response to the complaint, FAS has launched proceedings against Yandex and a representative of Instaforex. The case proceedings are set to officially start on August 7, 2018.
In case the defendants are found guilty, they face fines in the range of RUB 100,000 – RUB 500,000.
The number of the Forex companies that target Russian clientele without a license is significant. As of May 15, 2018, the number of clients of the licensed Forex brokers in Russia is 3,539. At the same time, there are about 200 unlicensed companies that offer Forex services to Russian clients. These companies usually operate offshore. The total number of Russian clients trading through platforms of brokers that do not have licenses issued by the Bank of Russia is around 500,000. The average deposit per client is RUB 50-60,000.
