Russian FAS official argues against increasing fines for illegal Forex ads
Tatiana Nikitina says raising the fines is not the most effective way of combatting illegal FX advertising.
Raising the fines for illegal Forex advertising is not the most efficient way to tackle this unlawful practice, Ms. Tatiana Nikitina, Head of the Department for Control over Advertising and Unfair Competition at the Russian Federal Antimonopoly Service (FAS) says.
She made the comments during a roundtable at the Russian State Duma (the lower chamber of the Russian Parliament) on July 9, 2019.
Ms Nikitina said that advertisers need clear examples of what lawful and compliant Forex advertising is. She advised that the Russian Association of Forex Dealers has to provide such examples.
Ms Nikitina explained that raising fines did not help reduce the volume of illicit ads by credit services providers. These ads did not include all conditions regarding the pricing of the loan extended to the clients. In the face of the increase in fines, these ads continued to circulate, the FAS official said.
Let’s recall that the Association of Forex Dealers, the self-regulatory organization for Russia’s OTC FX sector, is proposing a hike in the fines for illegal Forex ads. At present, the Russian law envisages fines of RUB 2,000 – RUB 2,500 for individuals who break the law on advertisement. The fine for legal entities (businesses) is from RUB 100,000 to RUB 500,000.
Earlier this month, FAS said it had launched a probe into the ads of online trading company InstaForex distributed via Yandex. The advertising message says “InstaForex- official website – broker licensed by the Central Bank”. The authorities remind the public that an entity cannot advertise services and products that it is not licensed to offer. FAS has concluded that InstaForex does not have the necessary license by the Central Bank of Russia. Hence, the ads in question violate the Law on Advertising. The respondents in this probe are Yandex and a representative of InstaForex.