Russian Forex SRO terminates membership of Alpari, Forex Club, TeleTrade, Fix Trade and TrustForex
The decision follows the revocation of the licenses of the five FX brokers by the Central Bank of Russia.
The Association of Forex dealers, the Russian Forex self-regulatory organization (SRO), has earlier today announced that it is terminating the membership of five companies: Alpari Forex, Forex Club, TeleTrade, Fix Trade and TrustForex.
The decision follows the revocation of the Forex dealer licenses of these five companies by the Central Bank of Russia. The regulator explained that the five brokers had repeatedly violated the Russian securities law. The violations range from providing false accounting statements to failures to follow the instructions issued by the Central Bank.
Under the Russian laws, licensed FX companies have to be members of an SRO. Unlicensed companies cannot be members of the FX SRO. Hence, the move by the Association is in line with the law.
Russian information agency TASS has reported that the activities of the five companies that were slammed by the Central Bank of Russia yesterday were focused on aggressive advertising and withdrawing Russian clients to foreign jurisdictions. This explanation has been provided by Larisa Selyutina, Head of the Securities Market and Commodity Market Department.
“All companies whose licenses have been revoked are ‘subsidiaries’ of large foreign forex dealers with recognizable brands, operating mainly in foreign forex markets. The decision to revoke is connected with the regulator’s deep concern for enormous risks for Russian citizens from the companies’ activities,” Selyutina was quoted as saying.
In its official announcement, the Central Bank explains that the licenses of five companies – Forex Club, Alpari Forex, Trustforex, Fix Trade, and TeleTrade Group, are taken away due to violations of the Russian law by the brokers. The companies have until January 27, 2019, to return all funds to their clients.
- Regarding Forex Club, the regulator explains that the broker has violated the Russian securities law numerous times. The violations include (inter alia): noncompliance with the instructions issued by the Central Bank; violations of the requirements for internal accounting; providing false data to the Central Bank.
- Regarding TrustForex, the Central Bank explains that the broker failed to comply with the Central Bank instructions, and provided false information to the regulator. The company also gave false information on its website and had flaws in its risk management system.
- TeleTrade, inter alia, violated the requirements for calculating its own funds (capital), and provided the regulator with false data. Furthermore, the company provided false information on its website.
- Alpari Forex failed to follow the instructions of the Central Bank of Russia. The company committed violations in the way it handled its internal accounting. The company also provided false accounting data and committed violations when handling risks.
- Fix Trade did not provide information on its website as required. In addition, it failed to follow the instructions issued by the Central Bank. The company also violated the Forex dealer license requirements and did not appropriately handle risks.