The Central Bank of Russia (CBR), which is in charge of the forex regulation in the country, has decided to include several existing organizations in a single register of self-regulatory organizations (SROs) and to admit them to act in this capacity, according to a notice by the bank published on Thursday.
The organizations are National Association of Stock Market Participants (NAUFOR), Professional Association of Registrars, Transfer Agents and Depositories (PARTAD), National Securities Market Association (NFA), National Association of Pension Funds (NAPF), National League of Management Companies (NLMC), Self-regulatory Organization Microfinance and Development (SRO MiR), and Self-regulatory Organisztion Edinstvo (SRO Edinstvo).
Entities that provide financial services are required to join a SRO in their industry within 180 days after the organization has been granted status of a financial institution, the Russian central bank said in the notice. The move aims to provide protection of investors’ rights and to establish unified standards for market participants, which would be set by the relevant SROs.
Organizations that have been active as self-regulatory bodies for at least a year will receive a SRO status within a two-month period. Entities that fail to obtain such status will not be allowed to act as self regulating organizations.
Many of the major Russian forex and binary options brokers already partake in SROs. In fact, they are required to join a SRO with at least 10 participants in order to be able to obtain a license. As of 1 January, 2016, Russia-registered forex brokers are not allowed to operate in the country without a license from the CBR. However, foreign forex brokers can still target Russian citizens even without a local license.