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

    Inside View

    Scalping or day trading?

    Among the many popular trading styles with both beginners and experienced traders are scalping, which allows you to extract small portions of profit from each price movement, and day trading, which aims to trade over a single day. In this article, you will learn what scalping and day trading are and their differences and peculiarities. Ultimately, you will learn what to look for to understand which trading style is right for you.

    Crypto Insider

    Unveiling Plasma Next: INTMAX’s Solution to Scale Ethereum with Stateless Layer

     INTMAX has launched Plasma Next on the mainnet α, a groundbreaking Layer 2 zkRollup, revealed by co-founder Leona Hioki at ETH Denver. This innovation offers scalability with constant costs per block, merging Plasma’s scalability goals with zkRollups’ security.

    Fintech

    Nuam selects Vermiculus for clearing system in Chile, Colombia, and Peru

    “We are proud to deliver a system that plays an integral role in the core of this historical merger, empowering one of Latin America’s most crucial markets with VeriClear’s state-of-the-art technology, together with our deep market expertise.”

    Retail FX, Uncategorized

    Moomoo launches super app in Malaysia

    “As an investment platform connecting 21 million retail investors globally, we envision collaborating with exchanges, regulatory bodies, and partners in the visible future to become the gateway, connecting Malaysia’s investment products to global capital and investors.”

    Executive Moves

    FXPA elects Joe Hoffman as new Chair in its 10th anniversary

    “The opportunity to serve as Chair of the FXPA is truly an honor, and I am committed to upholding the exceptional work of a FXPA. Given the recent market fluctuations due to global tensions, inflationary pressures, shifts in monetary policy, as well as the outcome of the US election and the risk of recession, brings the potential for more FX volatility in 2024. I am dedicated to expanding the FXPA’s membership and I’m excited about collaborating with all members to echo the unified voice of the FX market.”

    Market News

    Eurozone Fights Stagnation Whilst Stock Indices Rally

    European stock markets are defying economic gloom as they continue to soar to all-time highs, showcasing resilience amidst broader economic challenges.

    Web3

    Lisk Partners with Indonesia’s Communications Ministry to Boost Web3 Startup Ecosystem

    Discover the strategic partnership between Lisk and the Indonesian Ministry of Communications and Informatics, aimed at propelling local Web3 startups to new heights through comprehensive support and education.

    Executive Moves

    Admirals appoints founder Alexander Tsikhilov as CEO

    “Striking the right balance between sourcing new talent and developing and harnessing the strength and capabilities of our current workforce, is key to achieving our vision.”

    Executive Moves

    GCEX appoints Ignacio Corral and Helen Man to UK operation

    GCEX has announced the appointment of Ignacio Corral and Helen Man to its UK FCA-regulated operation based in London as the firm further expands its global business on account of increasing demand for its digital prime brokerage services.

    <