Russia’s “Megaregulator” to treat Forex brokers as medium securities market participants

Maria Nikolova

The new classification, included in proposed amendments to Russia’s “Federal Law on the Securities Market”, takes into account the risks associated with a given securities market participant operations.

The Russian Forex market has only recently started to budge, with licensed Forex brokers (or Forex dealers, as per their official designation under the Russian law) reporting the signing up of the first clients of their Russian businesses. The red tape for them, however, is growing every day, as has just been proved by the Central Bank of Russia.

The “Megaregulator” has earlier today published a consultation document, which envisages changes to the “Federal Law on the Securities Market”. Under the proposals, all professional participants in the securities market will have to define their category: small; medium; large or systemically important.

Forex dealers, however, do not have to study the criteria for picking a category. They will automatically be placed in the “medium” category. This is not necessarily a piece of bad news, as this frees Forex dealers of some extra requirements concerning internal auditing. The latter will apply only to large businesses (and systemically important ones). The placing of a business in the “medium” category, however, implies tougher requirements regarding the number of employees that have to be hired for performing various functions. There are no details in this respect at this point, however.

Why is the “Megaregulator” pushing for this additional classification of securities market participants? The authors of the project specify that these labels reflect the level of risks arising from the operations of each securities market participant. The idea is that businesses associated with higher risks will have to face tougher licensing and reporting requirements.

The consultation on the latest proposals by Russia’s central bank closes on June 19, 2017.

In the meantime, the number of licensed Forex dealers in Russia remains at humble 8, with the latest addition to the list being PSB-Forex, a Promsvyazbank company. The law requires that a licensee maintains a minimum net capital of RUB 100 million. There are also leverage restrictions – the leverage cap is set at 1:50.

The Russian Forex market has sparked the concerns of the Federal Antimonopoly Service (FAS). The body plans to introduce changes to normative acts, which aim to prohibit the soliciting of clients in the Forex market by entities that do not have Russian Forex dealer licenses. The prohibition will apply to educational centers of unlicensed Forex entities too.

The document, set to be ready by the third quarter of 2017, will be addressed to the Bank of Russia and/or the Russian government.

Read this next

Industry News

ASIC cancels/suspends AFS license of AFSL Group and Quantum Funds Management

ASIC canceled the AFS license of AFSL Group because it failed to lodge statements and audit reports and it did not maintain AFCA membership. The Australian regulator suspended Quantum because it does not have the required professional indemnity insurance coverage.

Executive Moves

BidX Markets hires Shaun French as Research Analyst – Multi Asset

“We believe with his background in the Financial Markets and being based in Dubai, he will be able to provide our clients with access to outstanding research, while also being in a great location to help support our international clients base which is growing at a rapid pace’’.

Institutional FX

Nasdaq migrates US options exchange to AWS with +10% performance in round-trip latency

Nasdaq has announced the successful migration of the core trading system of Nasdaq MRX – one of its six U.S. options exchanges – to Amazon Web Services (AWS).

Institutional FX

TraditionData launches oil swaps pricing data at a critical time in OTC oil traded markets

TraditionDATA has announced the release of a new proprietary Oil Swap Model (OSM) which brings further visibility into illiquid and opaque oil markets.


TNS connects to Tel Aviv Stock Exchange (TASE) as market data vendor

“This latest exchange connection allows TNS to provide access to approved recipients, including exchange members and market data vendors. This project includes market data for TASE’s equities and increases the number of market data feeds we now offer globally.”

Executive Moves

Cowen Digital taps Taylor S. Cable to lead Europe and Asia operation

“Cowen Digital is a pioneer in delivering institutional grade access to the digital asset ecosystem and I am very excited to join the team at this pivotal time to grow our presence in Europe and Asia.”

Industry News

ASIC sues American Express Australia for lack of TMD on credit cards

“ASIC has now taken multiple actions under the design and distribution regime, including issuing over 20 interim stop orders. This regime turned a new page in the regulation of financial products in Australia and is intended to deliver better outcomes for consumers. It is a priority for ASIC to maximize these increased protections and see the long-term benefits of the DDO regime realized.”

Institutional FX

Eurex reports mixed volumes for November 2022

Deutsche Börse’s derivatives-focused exchange, Eurex today said its total traded derivatives contracts grew by 10 percent in November, from 68.6 million to 75.3 million compared to the same month last year.

Digital Assets

AAX’s Nigerian customers storm local office amid withdrawal halt

According to the Nigerian media, angry consumers of the troubled crypto exchange AAX had stormed its local office hoping they can get their money back after the firm halted operations earlier in November.