The majority of Russian forex traders, or about 60-70%, saw their trading account balances at par, meaning they ended up with a loss or profit of up to $100, compared to what they started with, according to a survey conducted by Russian self-regulatory organization (SRO) for over-the-counter (OTC) financial instruments CRFIN, the results of which were made public on Friday. The remaining 30-40% were equally represented by clients that end at a profit and those that were at a loss at the end of a reporting period.
According to the survey, the majority of Russian investors, or about 70%, who start with forex trading later switched to trading in other financial instruments, such as stocks, indices, metals, energies, etc. In fact, about a third of stock investors started with forex trading in mind.
CRFIN’s survey was based on interviews with member-entities that collectively accounted for about 70% of the Russian-speaking forex market. According to them, the success statistics for the forex segment was similar to that of any other financial instruments, as well as in other business areas.
About 55% of all active client accounts in Russia-speaking markets were opened by more experienced traders more than a years ago with brokers that took part in the survey. However, the most active were clients with accounts opened at least two years ago, while those with one-three months old accounts , or about 6% of all, were least active.
Accounts with a life span between one and two years, and such between three months to one year, each made up 15% of all accounts. Meanwhile, new customers, or those with accounts opened up to a month ago, accounted for 23% of the total.
According to the survey participants, up to a third of non-active accounts had funds in them. Traders decide to close their accounts or to stop using them for a number of reasons, including if they have decided to take a break from trading, have turned to a loss, or have withdrawn their profits.
According to the Russian SRO’s survey, more than 60% of survey participants’ revenues were generated from spreads and commission. Meanwhile, about 55% of their turnover was from clients with at history of at least two years with their broker.
CRFIN reminded that the Russian market has about 500,000 active clients, according to the latest analysis of Interfax-Center for Economic Analysis (Interfax-CEA). The analysis also showed that the average monthly trading volume of the top 35 forex brokers operating in Russia amounted to a combined $332.6 billion in 2015, with Alpari leading with an average $90 billion per month. Meanwhile, the combined value of Russian client deposits that forex brokers handled was a monthly average of $500 million in 2015. The value is close to that of the retail deposits of US forex brokers, which have posted rather low figures in the past few months.
CRFIN, or Centre for Regulation in OTC Financial Instruments and Technologies, was set up in late 2010. It has disciplinary and control commissions which supervise and regulate its members, all of which are Russian forex brokers.
In mid-March this year, the Central Bank of Russia (CBR), which is in charge of the forex regulation in the country, decided to set up a register of all SROs in the country and to include several existing ones. However, CRFIN is currently not in the list, but is awaiting registration status. The CBR’s move is in line with the recently-introduced and on-going legislatory framework for the local forex market. As of 1 January this year, Russia-based forex brokers are not allowed to target local citizens, unless they are CBR-licensed. However, foreign forex brokers can still target Russian citizens even without a local license.
The SRO noted that the next step towards a more regulated forex market in Russia should be the requirement that all authorized forex brokers regularly provide performance statistics to the regulator and to SROs, alike.
Many of the major Russian forex brokers already partake in SROs since one of the prerequisites for acquiring Russian license is that brokers need to join a SRO with at least 10 participants. Finam Forex is the only entity to hold a Russian forex license, but there are more that are still on the waiting list.