The Federal Antimonopoly Service (FAS) in Russia is preparing to take action against brokers that are operating in the country without a license. Just after the long-awaited regulatory framework in Russia kicked in earlier this month, Russian authorities are making pledges to reign in the market.
There is no clarity what are the measures which the country’s authorities are preparing to take against foreign brokers that are operating in Russia. However it appears as if the primary effort will be directed towards local companies that are operating in the country without a license.
Russia was developing its regulatory framework for forex brokers for several years before it came into force earlier this month, enabling regulated brokers to advertise their products.
At present the Russian market is heavily fragmented with a number of brokers that do not have a Russian license still managing to attract customers despite not being able to officially advertise. Brokers that are based outside of Russia have a good chance to attract clients because they sometimes are regulated by institutions which are outside of the country.
Russian retail clients are deeming an FCA license a much more trustworthy stamp of approval than that of the Bank of Russia.
Initial reports suggest that the Russian FAS will submit its recommendations in the third quarter of this year. While there is still some time until then, foreign brokers could look at certain limitations with regards to dealing with Russian clients.
The information has been provided in a roadmap on the development of financial markets which was coordinated between the FAS and the Bank of Russia.
According to the document, legislative changes proposals will be introduced in order to prevent unlicensed brokers from on-boarding clients. The measures are said to be including the organization of educational efforts such as courses and seminars.
The Russian FAS outlines that the measures should lead to a better competitive environment on the market of providing forex trading services.
Source: Finance Magnates