Russian Forex brokers may benefit from simplified procedure for client identification

Maria Nikolova

The changes are outlined in a bill aiming to fight against the illegal offering of Forex services to Russian investors.

Russian Forex brokers (also known as Forex dealers, as per their official designation) may be able to make use of a simplified procedure for client identification. This proposal is outlined in a new bill submitted earlier this week at the Russian Duma – the lower chamber of the Russian parliament.

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.

In the face of the existing law for the Forex industry in Russia, the majority of Forex investors remain outside of the Russian jurisdiction.

One of the reasons for that is that the current Russian laws lack a provision permitting simpler client identification at Forex dealers, the authors of the bill state. An account at an offshore Forex broker, however, may be opened online, without a visit to the company’s office.

The bill envisages changes to Russia’s anti-money laundering law. It proposes a simpler procedure for client identification when signing a contract with a Forex dealer. The new rules will apply to companies that have Forex dealer licenses issued by the Bank of Russia.

Vladimir Putin signed Russia’s Forex law in late 2014, with the hopes pinned on the sector getting rid of scams and attracting more clients thanks to its enhanced reputation and increased confidence in the brokers. More than three years after Russia’s President Vladimir Putin signed the Forex law, it appears that the Forex industry in the country has stalled – at least in respect of the number of licensed entities offering their services to Russian residents.

Those who have been monitoring the situation in Russia are well aware that there are only 8 companies with Forex dealer licenses in Russia, including local giants like Alpari.

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.

Read this next

Retail FX

Weekly Roundup: John Oliver rips into MetaTrader, Binance to pay $10 billion

Welcome to this week’s roundup, where we delve into the latest developments in the Forex, Fintech, and cryptocurrency markets. Stay ahead of the curve with our comprehensive overview of the week’s most impactful events and trends across these dynamic sectors.

Retail FX

Lark Funding reopens to US traders, MyFundedFX picks cTrader

Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

Institutional FX

Cboe FX volume falls to lowest level since summer

Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

Retail FX

ThinkMarkets secures lucrative DFSA license in Dubai

Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

Digital Assets

New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

Digital Assets

Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

Digital Assets

Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

Institutional FX

Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

Industry News

Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.

<