On Thursday, December 27, the Central Bank revoked the licenses of five leading Forex brokers, giving one month to resolve issues with client accounts, and stop completely providing trading services. Alpari Forex, Forex Club, Fix Trade, Trastforex, Teletrade Group are among the guilty brokers.
The official reason was the systematic violation over the past year by brokers of the requirements of the legislation of the Russian Federation. According to the Central Bank, brokers used the Russian license as a marketing tool, attracting traders to their foreign offshore companies. Companies were aggressively advertising, “hiding” the license of the Central Bank and opening accounts in foreign companies with a similar brand. The changes will affect about 2 thousand traders with a total capital of about 35 million rubles, who opened accounts in the Russian offices of these companies.
Today, Forex brokers with the licenses of the Central Bank continue to provide services without difficulty. These are “VTB Forex”, “Alfa-Forex”, “PSB-Forex”, “FINAM Forex”. Three of the 4 brokers are affiliated structures of large banks.
Forex brokers with the license of the Central Bank: what traders should do
“Fear has big eyes.” On the Internet, rumors that brokers who had fallen out of favor curtailed offices in Russia began to spread, and this would immediately affect client accounts. There were even panicked calls for urgently closing accounts and withdrawing money, while the transition period until the end of January is still in effect. Also, there were recommendations in advance to prepare documents for submission to compensation funds, since those who are late will receive compensation for months.
Interesting fact: few people at the time of opening a real account opens a contract in which you can see a lot of useful information. For example, that the client communicates with the support of an office located in Russia, and the account is opened in a subsidiary outside the country. And Forex brokers with a license of the Central Bank essentially work in the same way as brokers without a license.
Alpari and Forex Club have already made an official statement, the general meaning of which is as follows:
- Brokers did not receive an official message from the Bank of Russia about the revocation of a license.
- In the near future, all clients of the Russian branch will receive notifications about the procedure for closing positions and recommendations for further actions (most likely the recommendations will be reduced to opening a new account). On the website of one of the brokers there is a logical comment: the trader’s account is opened at the branch of the Russian Federation only if the client personally went to that office to sign the contract. In other cases, the opening of accounts took place at companies located outside Russia.
- After official notification from the Central Bank, brokers intend to appeal this decision, thereby extending the entry into force of the Bank’s decision for an indefinite period.
What do traders do? Do not panic, read the contract and do not make hasty decisions. It is worth noting that many brokers have not received a license, and legal proceedings have been going on for several years against one of the Forex brokers with the licenses of the Central Bank. And these facts do not affect the provision of brokerage services. The only consequence is that now it will be more difficult for guilty brokers to advertise their services in the Russian Federation, but this is unlikely to significantly affect their trade turnover. Whether the decision of the Central Bank was made in favor of the bank brokers remaining with the license is a rhetorical question, but the essence remains the same: nothing will happen to traders working with brokers without a license now!