Forex companies, technology providers and trading software developers had been awaiting the arrival of October 24th this year, hopeful that the date would finally bring some clarity with regard to the regulation of the FX industry in one of the most influential jurisdictions in the world. Russia’s Duma (the lower chamber of the Russian parliament) had been set to hold the second reading of the Forex bill this Friday, however the vote has been deferred for reasons unknown.
The decision to put off the second reading for a later date marks the sixth postponement of the decisive vote and seriously raises the frustration in the FX industry. It has been more than a year since in June 2013 the bill passed successfully its first reading in the Duma and since then things appear to have budged only a little, with no laws for Russia’s FX sector in place.
The bill will most certainly undergo changes compared with the version voted at the first reading. Limits on maximum leverage are expected, with the cap to be set at 1:100 or 1:200, depending on whether the self-regulators or ambitious traders get what they want. Tough rules for FX advertising are also set to be proposed. On the brighter side, Russian FX brokers may hope for one of the lowest capital requirements in the world – RUB 3 million (USD 73,000) thanks to a recent document approved by Russia’s Central Bank.
Russian lawmakers rarely elaborate on the factors behind their agenda, so it should not be a surprise that they have not provided any explicit reasons for the postponement of the second reading. It should be noted, however, that the Forex bill was not a part of the so-called “priority projects” of the Duma for the autumn session of 2014.
Meanwhile, the need of a Forex law in Russia is quite clearly increasing, along with the growing necessity to protect investors from fraudulent schemes whose number has been flourishing lately. Self-regulatory organization CRFIN is publishing and updating a blacklist of fraudulent FX companies, however, as an SRO its actions have the power of mere recommendations. The list includes companies like FOREX-MMCIS, which recently implemented “anti-crisis” measures including severe restrictions on withdrawals. More recently, investment projects Alfareserve and Monolith Invest have been blacklisted too.
Adding to the uncertainty in Russia’s Forex realm, yesterday it became apparent that one more FX broker – ForexInn, also stopped its activities, leaving its clients in the dark over the fate of their deposits.