The recent array of mergers and acquisitions that have taken place in the FX industry sometimes have wider consequences than one would expect and GAIN Capital’s purchase of GFT appears to be a fresh piece of evidence to support this notion. The deal, finalized in September 2013, now starts to show all of its dimensions, among them is that Forex.com has become the first FX broker to offer spread betting to Russian traders.
This came to fruition after the integration of GFT into Forex.com UK, and the broker is now marketing the DealBook platform to its Russian clients too. DealBook is a multi-asset platform supporting a huge variety of instruments, with Forex.com placing an emphasis on the spread betting service. DealBook’s PC and Web versions are available in Russian, which will make exploring spread betting fairly easy for Russian traders.
To grasp the interest of potential clients, DealBook offers spread betting on more than 3,200 instruments, including equities, commodities, indices, popular and exotic currency pairs. Regarding the latter, it is worth noting that traders can spread bet on the USD/RUB pair too, in congruence with the overall global increase in demand for ruble liquidity.
Generally associated with British firms, as a result of the United Kingdom’s taxation laws relating to profits from trading or ‘betting’ differing somewhat, spread betting gives traders a chance to benefit from both rising and falling markets. Traders place bets of a certain size on the spread of a given trading instrument and then get to gain (or lose) depending on whether the market moves in the forecast direction.
The size of the outcome (profit or loss) depends on the stake size. On this basis, it became a very popular trading method in Britain as it was classified as betting and therefore subject to favorable taxation. It often requires a specific platform, hence the relative absence of MetaTrader 4 in Britain’s spread betting and CFD-orientated market.
By contrast, the service is barely known to the Russian online trading world, however, and there is nothing astonishing about that – after all, one of the major advantages always cited about spread betting is that its tax free status for British citizens is far less relevant elsewhere globally, rendering this particular format a hallmark for UK trading firms – Alpari UK, for instance, markets spread betting to traders from the UK and the Republic of Ireland.
For the time being, spread betting remains tax free in the UK, but chances are that this may be subject to change. In November 2013 UK lawmakers voiced their intention to reconsider the tax laws regarding spread betting and to close what they dubbed as a “loophole”.
In the UK, spread betting still has the status of gambling but in Russia the area is more difficult to clarify. Spread betting has no status assigned by regulators which is hardly a surprise – after all, Russia does not yet have firm rulings with regard to online trading, as its development of a full and comprehensive regulatory structure is still in the development stages, with president Vladimir Putin backing those in favor of providing a regulatory framework. The current version of the FX bill in Russia does not include any specifications or classifications of sub-activities of online trading, for instance, there is no mentioning of binary options or copying of trades. It is possible, however, that more details will appear in the amended version of the FX bill set to have its second reading at the Russian parliament in the autumn.