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Russia’s Forex law is a newborn piece of legislation, which was signed by Vladimir Putin not that long ago – in the end of December 2014. Since then, the actual work on implementing the law has started and this involves developing relevant subordinate legislation, a process that is at least as cumbersome and complex as the work on the Law itself.
A useful step in this direction was made on Wednesday, March 25th, as representatives of Russia’s Forex industry, including experts from the Bank of Russia and CRFIN, as well as members of the Civic Chamber of the Russian Federation, participated in a roundtable about nominee accounts.
Putting it bluntly, a nominee account is one where the nominee is the forex-dealer, whereas the beneficiary is the broker’s client (the trader).
Whereas in other jurisdictions the concept of nominee accounts is not novel, Russia started regulating this sort of accounts only in 2013 – the sole references to this type of business arrangement can be found in Russia’s Civil Code. So when it comes to applying this concept to a novel piece of legislation like the Russian Forex law, numerous issues arise. Participants in the roundtable discussed some basic topics like the rules to open (and close) such accounts, the procedure for depositing funds into them, etc.
Under the Civil Code, nominees are not allowed to arrest or withdraw funds from nominee accounts (there are exceptions, of course). Thus, a form of protection is offered to client funds, so one can see why the authors of Russia’s Forex law included this concept in it.
The future of nominee accounts when it comes to Russia’s Forex hinges on the decisions to be taken by officials at the Bank of Russia, who are advised on the matter by experts from CRFIN, the country’s self-regulatory organization for the Forex industry.
The announcement by CRFIN on the roundtable can be found here.