Earlier this morning the members of the Russian Duma heard the presentation of the FX bill at its third reading and then later had to cast their vote in favor or against the document. Data from the evening session of the parliament shows that the majority of voters supported the bill. It is now officially a law.
What’s next for the Forex law?
Within five days, the FX law has to be submitted for review to the Federation Council, which will have two weeks to assess it. Afterwards the law will have to be submitted to Russia’s president Vladimir Putin, who will have two weeks to make up his mind on whether to sign the law. The law comes into force on the day of its official publication.
Of course, the Federation Council (the upper chamber of the Russian parliament) may reject the law, whereas the president has the right to veto. If this happens, the law is returned to the Duma for another set of amendments.
An interesting peculiarity is that the Federation Council may skip the review of the law, which, in such a case, will automatically be sent to Putin.
What’s in the final text of the law?
Forex brokers in Russia will be regulated as Forex dealers and will be allowed to offer only OTC foreign exchange services. They are prohibited from combining Forex with any other activity in the securities market, including CFD trading.
The minimum net capital of a Forex dealer should be RUB 100 million (about $1.6 million), with the sum bigger for companies that have under their custody more than RUB 150 million of client funds.
Maximum leverage is set at 50:1, with the Bank of Russia having the right to raise that level depending on the kind of instrument and trade to 100:1.
To become an FX dealer, a company should become a member of a Forex self-regulatory organization. The SRO will be responsible for setting FX advertising standards and the requirements for trading equipment and software.
Forex brokers should have their trading systems and other software located in Russia.
Forex companies will have to make contributions to a Compensation Fund. The first installment is RUB 2 million and is due once the company joins the self-regulatory organization. The money from the fund should be used to compensate individual investors if a Forex dealer goes bankrupt.
Disputes between traders and brokers can be taken to arbitration court.
All Forex brokers willing to offer their services in Russia will have to obtain Forex dealer licenses and join an SRO not later than January 1, 2016. Those who don’t comply will have to cease their activities in Russia.
You can download the full text of the final version of the Forex law here.