Central Bank Sanctions Forex Platforms
MOSCOW, December 27
Russia’s Central bank revokes licenses of the largest forex platforms. According to Russian news agency TASS, The Russian Central Bank has revoked trading licenses of the five largest Russian forex dealers. The sanctioned firms include Forex Club, Fix Trade, Trustforex, Alpari Forex, and Teletrade Group, the regulator announced on today (Thursday 27th December 2018). The licenses will be revoked starting from January 27, 2019.
The Central Bank revoked licenses of five out of the nine Russian forex dealers. Alfa-forex, VTB-forex, PSB-forex, and Finam-forex remained on the market.
Liabilities of Russia’s five largest forex dealers amount to 35 mln rubles (around $505,000) and will be returned to clients in full by January 27, 2019, department head of the Central Bank Larisa Selyutina said.
According to the Central Bank, as of December 21, nine Forex dealers with a license are registered in Russia.
Relevant information is also available on the Russian Central Bank website.
The regulator has cited repeated violations throughout the year as the reason for revoking the licenses. The main charge being failure to fulfill or improper execution of the prescriptions of the Central Bank. The Central Bank also cited violations of the procedure for maintaining internal accounting as well as a violation of the requirements for the ratio of the amount of collateral provided by individuals to the company. Other noted breaches include violation of reporting procedures and provision of false reports, breaches by the organizations of the risk management systems, violation of the process for calculating funds and disclosure of inaccurate information on the companies websites.[the_ad_placement id=”content”]
The sanctioned companies are obliged to terminate all their professional activities in the securities market. The only exception being actions related to the termination of obligations to customers arising from their professional activities in the securities market, and to ensure the return of property to customers before January 27.
The Central Bank has also cancelled qualification certificates of supervisors and general directors of these companies.
“The total amount of liabilities with companies, whose licenses are revoked, is equal to 35 mln rubles ($505,000), accounting for approximately 3.7% of the total amount of money delivered by Russian nationals to licensed forex dealers,” the official said.
“These funds are at nominal accounts. Prior to starting their business, forex dealers must open a nominal account with the bank, where customers’ funds will be credited. The forex dealer will not have the right to dispose of such money. These funds will be repaid to clients by January 27,” Selyutina said.
This event will have limited effect on the Russian financial system according to Konstantin Korishchenko who serves as the Chairman of Management Board at Joint Stock Commercial Bank INVESTBANK Open-end JSC.
“Only some redirection of financial flows is possible here; it will not affect any macroeconomic indicators. Those who have traded through these companies will have to look for other intermediaries – but they are unlikely to turn to banks with this purpose.” Mr. Korishchenko said.
More on this can be found on the TASS at http://tass.com/economy/1038141
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Danny Deegan is the Editor and proprietor of eurasianmarket.com. Born in the UK, currently working in financial services with an emphasis on equity investments and forex trading.