Russian c-bank official says binary options and CFDs soon not to be offered to newbie investors
Sergey Shvetsov, who is known for his role in the formulation of Russia’s FX law, promises that there is a ban in store for offering binary options and CFDs to investors lacking the necessary qualification.
The offering of risky investment products such as binary options and CFDs to newbie investors will soon be prohibited in Russia. Sergey Shvetsov, First Deputy Governor of the Central Bank of Russia, quoted by Financial One magazine, said that the offering of such products to investors who lack the necessary qualification will soon be banned.
Mr Shvetsov’s comments were made during the International Investor Week, organized by IOSCO. He also warned newbie investors against investing in cryptocurrencies and being involved in any initial coin offerings. Thus, he reiterated the stance of Russia’s “Megaregulator” which recently outlined the risks associated with cryptocurrencies and ICOs in a special announcement.
The Bank of Russia officials rarely, if ever, speak about binary options. The latter are not regulated in Russia and this grey area is being filled with scammers seeking to profit from the lack of regulation. According to research by the Russian edition of Forbes, Russia accounted for 29% of the visits of four of the biggest binary options websites in April 2017. Forbes based its estimates on data derived from SimilarWeb.com. The data show that In April this year, the four platforms in question had more than 50 million visits. This means that Russia accounted for 14.5 million of them. Far behind it in the ranking are Thailand, Brazil, Turkey and Vietnam.
The fact that most binary options brokers that try to attract Russian clients are based offshore is making the control of this segment hard to impose. At present, the Bank of Russia has powers to block only certain domain names, such as those ending in .ru.
The Federal Antimonopoly Service (FAS) has been targeting online trading companies that do not have the necessary licenses to offer their services to Russian clients but nevertheless try to lure them. The latest example is a complaint against illegal advertising of the services of an online trading company registered offshore. The Moscow office of FAS said in September that it will add Seychelles-based Smartex International Ltd, owner of Olymp Trade, to the list of defendants in this illegal advertising case.
