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TSRFIN, Russia’s self-regulatory body which oversees the FX and OTC derivatives market in the Russian Federation has cited that whilst in some countries actions in the FX market is limited and regulated by the state, whereas in Russia, the FX market is virtually devoid of control.
“As the FX market is currently not regulated with regard to the interest of speculative individuals and in particular private investors, which is participated in by retail customers placing a deposit transaction through an electronic platform or by telephone, there is nothing to ensure that such investors are protected” stated Sergey Kharinov, Director of Alpha Forex during a radio broadcast.
He continued to state that “There is no delivery of the currency – the fixation by the trader focuses on the potential financial result, which is caused by the change rate of one currency against another. At present, this is not a regulated industry in Russia, however, the relevance of the question as to whether it should be regulated is quite high, because this type of trading exists in Russia and has rapidly expanded during the past 15-20 years.”
According to Mr. Kharinov, during this period, approximately 10% of the population has conducted this kind of transaction with retail FX brokerages.
Ulyana Vlasenko, a board member TSRFIN, noted that experts are now developing proposals for the regulation of the market in Russia. She believes that Russia could learn from the U.S. experience, and monitor the public regulator with the participation of the self-regulatory organization.
“We hope that our legislation will be implemented in the form of the self-regulatory organization’s existing model, thus uniting the professional FX market. It will develop professional standards and activities, control information, enable the collection of reports and provide the relevant information to its regulator, which will be the Central Bank of the Russian Federation.
Now that the central bank has become a very powerful regulator that will control not only traditional banking operations, but also the FX market, insurance companies, and microfinance institutions. In our opinion, this particular model would be as effective as is possible: we would help the central bank to create a fair market, and, in turn, can maintain the importance of monitoring the cleanliness of the market and upholding its reputation.”- said Ms. Vlasenko.
LeapRate reported in March this year that incumbent President Vladimir Putin is keen to establish a regulatory framework for FX, however the form that it will take is yet at stake.