Russia’s Forex SRO proposes hike in fines for illegal FX ads
Russia’s Association of Forex Dealers proposes an increase in the fines for illegal Forex advertising to RUB1.5 million.
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. According to a report by information agency TASS, the self-regulatory organization is pushing for a threefold increase in the size of the penalties.
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.
The SRO also believe it would be necessary to introduce penalties for providing misinformation about the risks associated with Forex trading.
According to TASS, the initiative of the Association of Forex Dealers has been back by Mikhail Emelianov, First Deputy Chairman of State Duma Committee on construction and legislation. The matter is set to be discussed during a roundtable at the Russian Duma to be held on July 9, 2019.
On December 27, 2018, the Central Bank of Russia annulled the Forex dealer licenses of some of the major players in the Russian retail Forex scene, including Alpari, Forex Club and TeleTrade.
In its official announcement, the Central Bank explained that the licenses of five companies – Forex Club, Alpari Forex, Trustforex, Fix Trade, and TeleTrade Group, were taken away due to violations of the Russian law by the brokers.
- Regarding Forex Club, the regulator explained that the broker had 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 said 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. The company also provided false information on its website.
- Alpari Forex also 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. It also 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.
There are only four licensed FX dealers in Russia at present.