Russian c-bank may allow Forex firms to offer greater variety of products
But the leverage on new products will be reduced, says Sergey Shvetsov, First Deputy Governor of the Central Bank of Russia.
The Central Bank of Russia is considering to allow Forex dealers (the official designation for Forex brokers in Russia) to offer more products.
Sergey Shvetsov, First Deputy Governor of the Central Bank of Russia, was quoted by information agency TASS as saying that the regulator will be expanding the variety of products that Forex dealers may offer but that these products will have lower leverage. At present the maximum leverage is 1:50.
Mr Shvetsov explained that the expansion will concern shares and other securities. Currently, Russian laws envisage that Forex dealers can offer CFDs on currencies only.
He added that such a move would help protect investors as they would be less likely to make use of the services of offshore firms if they will be offered these services in Russia.
With regard to investor protection, Mr Shvetsov said that the “Megaregulator” is planning to prohibit non-qualified investors from trading with leveraged products in certain cases. This will apply, for instance, in cases where the investor does not have sufficient funds.
In May this year, a new bill was submitted at the Russian Duma – the lower chamber of the Russian parliament. The bill outlines such a simplified procedure for client identification.
The authors of the document explain that, 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.
There are eight companies with Forex dealer licenses in Russia. The activity of the Russian “megaregulator” with regard to Forex licensing in 2017 can be summarized as follows:
- 2 license applications granted;
- 2 license applications rejected (no names mentioned);
- 1 Forex dealer license modified.