The Central Bank of Russia has asked five foreign Forex brokers to cease their business in Russia or to conduct outstanding transactions by 27 January. Until then, all client funds must be repaid and the transactions must be definitively terminated.
The brokers are Alpari, TeleTrade, Instaforex, Trustforex and Forex Club.
So this is certainly about well-known retail brokers who wanted to build business in Russia. For several years, brokers wishing to offer their services to Russian private clients have also had to open a branch in Russia. So far, only nine brokers have complied with this rule. At the time, the central bank ordered the blockade of 130 websites of foreign brokers for Internet users in Russia. These brokers were believed to be recruiting clients in Russia, but without a branch in Russia.
But it is well known. As an Internet user, it is relatively easy to bypass the country bans and, as a Russian, continue to browse the relevant foreign websites. Within the industry, it is well known that in such cases, the vast majority of gamblers continue to trade with foreign brokers who do not have a branch in Russia. As a result, the central bank in Moscow is likely to take a knee of its own if, with such a quasi-total ban on foreign offers, the last Russian traders are driven into (from the Russian point of view) unregulated offshore trading.
Officially, the central bank accuses brokers of, for example, not implementing all the central bank’s instructions that accounting requirements have been violated, or that incorrect data has been transmitted to the central bank. It was also about false information on the websites of forex brokers, as well as errors in their risk management systems. According to Russian media reports, the supervisors were probably concerned that these Forex brokers were aggressively advertising to get Russian clients outside Russia to open accounts at the broker’s actual headquarters – outside the Access by the Russian authorities.
Incidentally, a central bank director has said so. And they want to protect Russians from big risks. Yes, yes, the risks. After all, the people in the EU want to protect the citizens more and more from this! The Russians are probably concerned with having (our opinion) control over the money flows and speculative habits of citizens. We believe that such a flight from customers can ultimately only be prevented by means of capital controls, i.e. by prohibiting one’s own citizens from transferring money abroad. But then you end up in states a la Venezuela or Argentina, if you really pass it consistently.
You can’t compare it 1:1. But with their actions, the Russians are ultimately doing the same as EU regulators, who are increasing restrictions on retail clients in CFD and Forex trading. The winners are the offshore brokers in the Caribbean and other sunny places around the world, where retail customers can trade freely – of course, with a correspondingly higher risk of being brutally ripped off by dubious providers (higher spreads, unclean executions, broker failures, etc.).