The Forex law that came into force in 2016 should theoretically, with a light hand, the Central Bank set up a relative order in the over-the-counter market, but more than a year has passed and the situation has become even more complicated.
- Help: numerous complaints about the dishonesty of brokers forced the Central Bank to resort to compulsory licensing. Since 2016, Forex brokers with Russian registration have been prohibited from working with individuals without a license. To obtain a license, a broker must fulfill the technical requirements of the Central Bank and, having made an entrance fee, become a member of an SRO.
The Forex Law came into force, but for traders the situation only became more complicated. First, some of them were forced to change their Russian registration to offshore. Secondly, using the traders’ ignorance, brokers began to hide behind the licenses of the CROFR, KROUFR and CRFIN, although these organizations have the status of SRO (they do not have a self-regulating organization).
He added fuel to the fire and the Central Bank was the first to receive the status of an SRO in the middle of October 2016! In other words, the brokers physically could not fully comply with the requirements of the Forex Law for 9 months. By the beginning of March 2017, only 6 Forex brokers have a license: Finam, Teletrade, Alpari, Forex Club, VTB24 and Trastforex.
CRFIN was completely reformed into NAFD, limiting access to its blacklists. This misled brokers, who, not understanding what to do, began to indicate both organizations (for example, Amarkets below).
The situation with binary options brokers is even more interesting. Back in November 2015, one of the brokers asked the Central Bank to clarify the status of trading in binary options. The answer of the Central Bank turned out to be unexpected: the Central Bank does not see the prospects of this direction, therefore they will “choke” it with all their might. A request was also made to NAUFOR, the answer was blurred:
- The Civil Code of the Russian Federation (Art. 1062) does not welcome transactions with foreign counterparties in the field of OTC derivatives;
- There is no article regulating options, since there is no definition of “binary options” in principle. Articles 4 and 4.1. The Law on the Securities Market does not allow the instrument to be classified as a financial asset;
- Anyone can organize activities with binary options, there is no regulation of unfair advertising.
Forex Law: what should traders prepare for
The Forex Law has clearly shown that the Central Bank, by and large, is not interested in the problems of traders. Therefore, in the future licensing of brokers will not only affect traders, but in principle will not solve the problems of fraud.
- Conclusion: licensing should not be for the trader the main factor in choosing a broker in Forex!
A small “consolation” is the opportunity to write a complaint to an international regulator (for example, CySEC — how to write a complaint correctly, we will tell in the following articles), but the probability of a response is small. But what legislative changes are really worth paying attention to – the accession of the Russian Federation to an international agreement on foreign accounts from 2018, which is fraught with a penalty for concealing profits in Forex. We will also explain how to pay taxes on profits in the following articles.