Russian c-bank grants Forex dealer license to Alfa-Forex
This takes the number of licensed Forex dealers in Russia to nine.
The Central Bank of Russia has earlier today posted a brief notice on its website, informing the public that it has issued a Forex dealer license to Alfa-Forex.
The notice mentions no reasons for the regulatory decision. The company is based in Moscow and is now included in the list of licensed Forex dealers (the official designation of Forex brokers in Russia). There are now nine licensed Forex dealers in Russia, including local majors like Alpari.
This number is relatively low and may be partially explained via the rigid requirements (for instance, the ones concerning minimum capital) for obtaining a license from the Central Bank. Another obstacle for the Russian Forex market is the lack of simplified client identification procedure. There was a bill outlining such a procedure but it was withdrawn by its authors in November.
Let’s recall that, according to the authors of the document, as of May 15, 2018, the number of clients of the licensed Forex brokers in Russia was 3,539. At the same time, there were 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 stood at around 500,000.
In the face of the existing law for the Forex industry in Russia, the majority of Forex investors remain outside of the Russian jurisdiction.
When the bill was filed, the authors noted that one of the reasons for the difference in the client numbers of Russian and offshore brokers is that the current Russian laws lack a provision permitting simpler client identification at Forex dealers. An account at an offshore Forex broker, however, may be opened online, without a visit to the company’s office.
The bill envisaged changes to Russia’s anti-money laundering law. It proposed a simpler procedure for client identification when signing a contract with a Forex dealer. The new rules would have applied to companies that have Forex dealer licenses issued by the Bank of Russia.