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Russia’s largest privately owned commercial bank Alfa-Bank announced its board of directors decided to set up own daughter forex broker company Alfa-Forex. Currently the bank operates an eponymous forex broker, based in Cyprus.
It is a brand of Alfa Capital Holdings, part of the Alfa-Banking Group and is licensed by the Cyprus Securities Exchange Commission (CySEC).
Vladimir Verbitskiy, Alfa-Bank’s vice president for development and sales, told the Russian Interfax news agency that the new legal entity will apply for a forex broker license from the country’s megaregulator Bank of Russia and hopes to get it “within a few months”. He, however, did not disclose the starting capital of the new company.
Alfa-Bank would be the second large Russian bank after VTB24 to consider the setting up of a forex broker subsidiary.
Currently only one Russia-based forex broker – Finam – holds a license from the Bank of Russia. Others, including the largest – Alpari – have applied for a license a while ago, but the regulator still has not replied.
By law that came into effect in the beginning of 2016, the forex brokers, based in the country, must obtain a license. Brokers, based in other countries, can also operate in Russia. According to the new regulations, the forex broker must perform solely this activity and cannot offer other types of financial services, including professional activities on the securities market. The company must also have no less than RUB 100 million ($1.5 million) in own capital.
Meanwhile, the Russian media report that the legislators are considering even tighter rules for forex brokers.
The current Cyprus-based Alfa-Forex broker focuses on the markets of EU, Russia and the former Soviet countries. According to the 2016 data published by Interfax-Center for Economic Analysis (Interfax-CEA), Alfa-Forex is the fourth largest forex broker in terms of average monthly trading volume and eight in terms of number of clients.