Centre for Regulation in OTC Financial Instruments and Technologies, Russia’s Forex self-regulatory organization, has officially recommended to the Bank of Russia to increase the maximum leverage for Forex trading to 1:100.
The level is two times higher than the 1:50 level stipulated in the current version of the Forex law, which Russia’s president Vladimir Putin signed in the end of 2014. We remind you that the restrictions on leverage are not yet in place in Russia – the new rules in this respect are set come into effect in October 2015.
This is not the first time that the limits on maximum leverage determined in Russia’s FX law are questioned. Retail FX traders in the country also seem to be in favor of more generous leverage, as recent polls have shown. When the law was drafted, however, its authors took into account the hefty risks associated with high leverage.
Relaxing leverage limits was not the only proposal the Bank of Russia received from CRFIN.
The organization also recommended that the regulator allows Russian Forex companies to offer trading in other derivatives too. The current version of the FX law allows Forex dealers (the latter is the correct name for Forex brokers in Russia) to provide only trading in currencies (FX spot trading) whereas the status of instruments like CFDs is rather shady.
CRFIN recommends that Forex dealers are also allowed to provide trading in derivatives with underlying assets like precious metals, commodities and corporate shares.
These proposals are part of a list of recommended amendments to Russia’s FX law the Forex self-regulatory organization has filed with the Bank of Russia. It will be interesting to see whether the central bank will accept any of these.
To view the official announcement by CRFIN, click here.