Newly installed Russia regulatory head Sergey Shvetsov seems to be heading strongly toward regulating the forex sector.
As first appeared in Forexbrokerz… Deputy Chairman of the Central Bank of the Russian Federation Sergey Shvetsov was quoted in ITAR-TASS (in Russian) as saying that as financial regulator he is looking at banning advertising by foreign brokers in Russia.
The current regulatory framework in Russia might be changed in a rather dramatic way, and advertising for foreign brokers may be banned.
One can argue that a change is not a big surprise, considering the fact that as of right now there is no regulatory framework to be changed, but things might get rocky for brokerages operating in the Russian market. Back in August the head of the Bank of Russia Elvira Nabiulina appointed Sergey Shvetsov as a head of the Russian regulator of financial markets and he seems to be getting the hang of his new job.
It is debatable as to where is a ban on advertising is coming from – while the regulatory body claims that it is being done to prevent tax evasion by limiting offshore brokerages’ influence on local customers, it is possible that the crackdown can be coming from a lobby that is trying to limit foreign competition. Of course it is rather difficult to prove such a claim, especially at a time when there is no licensing procedure even for locally operating brokers.
What’s certain is that the Russian government is not planning to leave the Forex market in an unregulated environment.
Mr Shvetsov has stated that the Bank of Russia will be working on expanding the draft of the regulatory law introducing changes in the ways foreign exchange operators conduct business in Russia. The amendments will be discussed in the Russian Duma on the 23rd of October. The law concerns operations of foreign exchange dealers in Russia and a big part of the changes clarify that any arguments between clients and brokerages will be resolved in court. The new draft also reflects the ways in which brokers and their clients will be taxed.
Back to the advertising matter – while still unlikely to happen this might be a way for the Russian authorities to maintain a soft stance towards domestically registered companies and force the hand of companies willing to have Russian clients to apply for regulation in yet another country. It seems as this is becoming a trend and in the future the industry might face further regulatory fragmentation.