One of Russia’s leading banks, VTB24, considers the establishing of a subsidiary offering forex trading services and applying for a license from the regulator Bank of Russia, reports the Russian news agency Interfax.
It quotes the bank’s press office who said the setting up of a limited liability company will be discussed at a meeting of the bank’s supervisory board on February 26. “The board will discuss a proposal of setting up a subsidiary, which would act as a forex dealer”, the press office said. “If the supervisory board takes a positive decision, the preparation for registration of a legal entity will be started. After that the new company will apply for a forex dealer license from Bank of Russia.”
Currently VTB24 offers forex trading to its customers, even though it doesn’t have a forex dealer license, as required by a Russian law that came into effect on January 1, 2016. On its website onlinebroker.ru, the bank offers trade in 32 forex pairs, including USD/RUB and EUR/RUB, using the MetaTrader5 and OnlineBroker trading platforms. The leverage is up to 1:200.
The Russian business site RBC quotes a legal specialist who explained that VTB24 has found a legal loophole. By concluding with private citizens currency exchange contracts through trading accounts and applying the rules for opening bank accounts in foreign currencies, the bank has found a way to circumvent the forex dealer license requirement. The Bank of Russia, however, noted that the additional conditions in the contracts does not exclude describing this activity as forex dealing.
At the same time representatives of the bank said it offers its clients fully legal services and added that since the beginning of 2016, 337 new clients signed contracts for forex trading.
Right now only one company in Russia has a forex dealer license – Finam Forex. Several others have applied, including the Russian market leader Alpari, ForexClub, TeleTrade, but their applications are still pending. Meanwhile some of them, like Alpari, are operating through subsidiaries, regulated in other countries.
At the same time the deputy chair of the Bank of Russia Sergey Shvetsov noted that the regulator has no interest in the popularity of forex trading in Russia. “This product is useless for the population and it does not satisfy those needs we consider important,” he said, quoted by RBC. “The forex market is a casino satisfying the gambling needs.”