Russia’s New Forex Law to Kick In October 2020

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The Best Forex Countryin Russia 2020

Finding the best forex brokers in Russia can seem like a difficult task, especially if you’re only just starting your forex career. Fortunately, on this page, we’ve provided you with everything you need to know about trading with the best Russian forex brokers.

At TopRatedForexBrokers, our aim is to ensure that you have the best forex trading experience possible. We also want to save you time and money. This is why our experts have reviewed hundreds of forex brokers in Russia and have created this list of top picks.

All of the best forex brokers listed on this page accept Russian traders and are fully regulated. This means they are fair and trustworthy. Some sites will be overseen by the CBR (Central Bank of Russia) whilst others boast licenses from other European regulatory heavyweights such as the FCA and CySEC.

Use our list below to register at the best forex brokers accepting Russian traders today, or continue reading to learn:

  • How the Russian forex market is regulated and by who
  • How to choose the perfect Russian forex broker for you

Best and most trusted forex brokers in April 2020

A brief history of Forex trading in Russia

When Forex trading first started in Russia there were only a handful of traders taking part. But ever since 1990, Russian interest in the Forex market has expanded considerably. Nowadays there are thousands of traders and quite a number of Forex brokers. A number of the most successful Forex brokers in Russia have grown to encompass the global Forex market, but there is still room for more development in the domestic Russian market.
The Russian economy has been developing in recent years, together with its participation in the global economy. The Russian government decided to introduce the convertibility of the ruble because it wanted to help the country’s transition into a true market economy. However, it has since changed from multiple exchange rates, to managed floating rates to soft peg. An important currency for exchange in Russia is the US dollar. But the Russian Ruble hasn’t been forgotten, as it is an important hard currency because of the changes taking place in the Forex market in Russia. These changes included price liberalizations, in 1992. Holding hard currency reserves is allowed in Russia, and many Russian citizens choose to convert their rubles into dollars and vice versa. Thereby benefiting from exchange rate fluctuations.
Earlier on in history, foreign exchange was only possible through public auctions. But in 1989, when Russian authorities decided to introduce flexibility in exchange rates, things started to change. The first currency exchange was set up in 1991, by the Central Bank of Russia. It was named the Moscow Interbank Currency Exchange (MICEX) in 1992, and has been the body through which foreign currency trading is carried out ever since then. Essentially, however, the Forex market is regulated, moderated, and controlled by the Central Bank of Russia. It has the power to issue special foreign exchange licenses to commercial banking institutions, so is essentially in control of the internal foreign exchange turnover being generated.

How Forex brokers in Russia are regulated

Regulation of the Forex industry is of vital importance, as well as regulation of all other financial products being offered to investors. This is because it creates a safe environment for investors to trade within and gives guarantees that those offering such products won’t shut down in the middle of the night and run away with all the cash.
The local financial activities regulator in Russia, is the Federal Financial Markets Service (FFMS), and was responsible for drafting regulations for Russian Forex brokers offering Forex investments. The regulations were drafted in 2008, and are just now coming into force.

Companies now wanting to offer their services with regards Forex trading, have to obtain a Forex dealer license, if they wish to operate in Russia or target Russian citizens The regulations include strict rules for the marketing of their services and rather demanding provisions in relation to client funds protection. The law has also recently introduced restriction on the maximum permissible leverage. Rather unpopularly, they set it as 50:1. Those Forex brokers in Russia wishing to operate had until January 2020 to obtain a licence, and the first Russian Forex brokers to be granted one have now been announced.

There is another regulatory body that functions as a regulatory body, CRFIN, but is more of a self-regulating body.
Wherever you reside there are a number of important considerations to bear in mind when choosing the best Forex broker. It’s not that difficult a decision to make, providing you bear a few things in mind. But should you just pick one randomly out of the hat, you could stand to make some sizeable losses. Picking the right broker is an important part of Forex trading.

A 3 step guide to picking the best Forex broker

Follow these 3 simple steps and you’ll be able to narrow down your choices, before getting in touch with a few different brokers.

  • Step one – Do your research – There are a few things you should be looking out for when choosing the best Forex brokers in Russia. Are they registered with any regulatory bodies. It is quick and easy to undertake an online search with the different regulatory bodies. Think very carefully before choosing one that isn’t registered or licensed. Find out whether the broker has a dealing desk. Are fixed or non-fixed spreads offered. How much leverage is allowed? If it is more than 50:1 then it’s not going to be a broker that is registered with the Russian regulatory body.
  • Step two – Make comparisons – There are a number of sites who will do this for you, or take the old fashioned route and use a pen and paper, and make a list of your own.
  • Step three – Open a demo account -Find a couple of brokers you like the look of and open up a demo account. Try trading in different market environments and learn the features of the different trading platform. And don’t be afraid to ask questions. This will also be a great opportunity to check out the level of customer service.

Opinion: Forex Regulation in Russia Will Kill the Market

Open Mic blog: Igor Volkov from MFX criticizes the manner used in the Russian Federation to regulate forex trade.

A growing number of experts from the Russian OTC market are publicly voicing their professional opinion, and Forex Magnates Russia is happy and proud to give them the opportunity to do so. In our “Open Mic” section we have a new entrant, a pro and a forex market vet, Igor Volkov, who shares his unorthodox viewpoint about this market’s regulation in Russia.

I think both traders and brokers are getting fed up with the question of forex market regulation in Russia. Industry insiders have taken two opposite positions overall: some publicly praise any initiative by the government, happy with the start of a period of regulation, and others would rather wait silently and see what happens. Yet these two camps have one thing in common: 90 percent of market players, I believe, have no plans of changing any aspect of how they do business when January 1, 2020 comes.

All parties involved want regulation

The discussion about the Russian forex market needing regulation has been going on for a while already. There are enough supporters of this idea. Clients want regulation because they need some kind of security and the opportunity to work in “non-banana republic” jurisdictions. It seems that brokers also want regulation, which would make sure only legitimate companies operate in this market. Even stock brokers are backing the initiative, hoping that the improved reputation of the forex market will help the emergence of a new class of investors and will hence increase client numbers in this market. The authorities are also interested in regulation, probably tired of having to discuss complaints about “bad brokers” who have failed to give their clients the money they’re due. Besides, a regulated market will provide more income for the budget.

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There is just one problem – all these statements of support look more like PR than a real willingness to change the situation.

What do traders want? Most people won’t rush to open accounts at some “pretty” new forex brokers.

Let’s see. What do traders want? They want to turn a profit, and the larger, the better, this is only logical. Are they interested in the 13% income tax that will fall on their shoulders in a regulated market? Hardly. Will they pay it willingly? Again, hardly. Unless the broker is the tax agent. Moving on. What trading conditions would a newbie trader want? Higher leverage, a lot of nice, diverse instruments to choose from (although these will be limited to just five), fast execution, and the chance to put in and take out money from their account in any way they like and fast.

What does regulation give the traders? A leverage of 1:50, a set of currency pairs in the instrument department, money transfers via banks only (which, as we all know, is far from fast), and a question about execution and guaranteed prices hanging over the market. In other words, regulation does not give traders any of the things they want.

forex is not the banking sector

What do these limitations offer? The opportunity for traders to work with a licensed broker, who will do what? In case of bankruptcy, they will pay their clients from some supposed compensation fund. That’s good. And what happens when the money in this fund runs out? The correct answer is: nothing. After all, forex, in terms of people involved in the industry, is not the banking sector, which the government is ready to support with credits from the central bank and the Deposit Insurance Agency.

What the traders – about whom everyone is so concerned – get is a substitute for regulation, which actually gives them nothing and only worsens current trading conditions. Would this interest traders? It would interest some of them. Yet I’m certain that the bulk of people operating on the forex market will not rush to open accounts at some “pretty” Russian forex brokers. At the same time, I wouldn’t be surprised if the presence of licensed Russian brokers on the market will be a bonus for traders when choosing a foreign (most commonly offshore) forex brokerage. Clients always want to work with a service provider that offers comfortable conditions. A broker offering an uninteresting and unappealing service lineup will hardly be worth their interest.

What do brokers want? They will continue operating even without a license considered by many as unnecessary

A few words about what brokers want. I’ll start by saying that the size of the capital required for licensed brokers is seriously inflated and I don’t see what its purpose is. And the problem is not that it’s too large – it’s fully affordable for many brokers – the problem is that it is pointless.

Let’s take a look at banks, which are subject to strict requirements, including ones regarding their capital. The number of revoked licenses and bankruptcies among local lenders has revealed that not everything they write in their reports that they submit to regulators is necessarily true. How many companies and individual creditors have failed to be repaid by these banks because there was nothing to repay the credits with? A lot. Will the capital of a forex company guarantee its stability? No one can say for sure.

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the capital requirement will kick out of the market a lot of smaller but stable companies

For starters, this minimum required capital will kick out of the market a lot of smaller but stable companies, which will continue their operation in the shady parts of the business world. They’ll shut down their elegant offices, remove their addresses from websites and stop advertising on Yandex but they will continue to operate. They’ll move their advertising budgets to Google and foreign platforms, will adjust their client targeting, not excluding Russia, and will focus more on cold calling and increase their presence in co-working spaces and chat rooms.

One thing is clear: these forex brokers will continue operating even without the license, which is considered unnecessary by many. The only potentially serious limitation that will make their job more difficult will be the possible ban for clients to use payment systems.

The market is once again being driven into the shadows

The purpose of regulation is not to squeeze players and products out of a market. The purpose of regulation is to provide security for both the service providers and their clients. The law that has been drafted does not offer security for either of these parties. The market won’t become more transparent, for which all forex brokers have asked, the market will only become shadier.

One more thing. The law does not protect brokers. From anything. Clients themselves are not always nice and sweet. Every forex brokerage has had some experience with cheaters ready to literally take the last shirt of the broker’s back if they get the chance. For the regulator, it seems, these cheaters are a problem that the brokers have to solve on their own.

The broker’s capital and the clients’ accounts will need to be deposited somewhere

The broker’s capital and the clients’ accounts will need to be deposited somewhere. In a Russian bank, perhaps? And what if this bank gets its license revoked? Will the broker go broke? Even if the broker puts their money in ten different, trusted banks, nothing can guarantee that in case of trouble legal entities will get their deposits back. There is no stability in this country’s banking system and they want to tie us to it even more tightly.

Also, I don’t quite understand how brokers will pay their taxes. What will their tax base be: the commissions they receive? The profit they make from their clients? How and where will these metrics be calculated and checked? Besides, there are our marketing activities to factor in. We distribute a lot of bonuses, prizes and awards, and we share our profits with our partners. How will these be accounted for? Or are we simply supposed to become the rotten bog with minimum activity that this country’s stock market used to be for a long time?

To conclude: the regulator has little idea of what needs to be done. All of this is killing the decent market

My opinion about the manner chosen for this regulation in Russia is unequivocal. It is killing the decent market. The regulatory body has little idea of what needs to be done. I have the feeling that the people involved in the legislation have forgot or refused to use the input of industry insiders, and I don’t mean the talking heads, I mean the people who know the process inside and out.

I think it would be a good idea for these regulation and licensing planners to come out of their offices and spend some time with the brokers, see how the work is done. Then there will be fewer incomprehensible initiatives, less paper wasted on all sorts of by-laws and acts that nobody reads, and more clarity and sense in what is being done.

Igor Volkov is the owner and President of MFX Broker and a trader. In 2006 he set up and headed as president of Masterforex, using funds he earned as a trader. In 2008 he founded and became President of the MFX Group holding. The next year he graduated from the National Open Institute of Russia in St Petersburg. His main areas of activity include financial consultancy, investments, brokerages, construction and charity. In 2020, Masterforex became a separate holding company, MFX Broker, which focuses on Southeast Asia, Russia and CIS (Commonwealth of Independent States). Currently, MFX Broker has clients and partners from 160 countries across the globe.

Progressive implementation of New Russian Forex Law

Progress has been made, ever since the Russian President Vladimir Putin signed the New Russian Forex Law back in December 2020, urging the Forex industry in Russia to become finally regulated.

The first section of the document was already enforced at the start of 2020, ensuring the right of court protection for the investors. Still the effective date for enacting all of the remaining elements of the Russian Forex law is projected on October 15 th 2020, hence numerous of affairs is in need of further development.

Following, last Friday, on February 13 th 2020, a meeting was held between the representatives from various departments of the Central Bank of Russia and the SRO TSRFIN, the Russian Forex self-regulatory body, discussing the strategy on the implementation of Russia’s Forex Law. Various affairs were discussed, along with the items of the previous list that was drawn at the initial stage of the proposal, which includes the highly argued 1:50 leverage limit .

Other topics that were addressed range from the development of licensing requirements, CFD trading, to the trading software standards. Aside molding a strategy for these aforementioned procedures, it was repeatedly concluded that the cooperation between the Central Bank of Russian and CFRIN is vital for the regulating the Russian Forex industry.

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