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The Forex Dealers Association (AFD) has applied for registration as a forex self-regulatory organization (SRO) with Russia’s megaregulator the Bank of Russia, report a number of Russian-language media.
According to the publications, the AFD is established by Finam Forex, the only Russia-based forex broker who has a license from the central bank, which has prepared all the necessary documents.
If the organization obtains a registration, it would become the first forex SRO in the country to do so. Another similar entity, the SRO for over-the-counter (OTC) financial instruments CRFIN still has not applied. The situation with the latter, however, is rather convoluted and is much similar to a Catch 22. For it to apply, at least one of its members must have a forex broker license from the Bank of Russia. Several of its members have already applied, but the megaregulator is inexplicably delaying its decision. At the same time, the regulated forex brokers operating in Russia must be members of a licensed SRO.
Meanwhile, the Russian Kommersant daily reports that a third forex SRO might appear and it would consist of the forex broker subsidiaries of major Russian banks. So far at least two of them – VTB 24 and Alfa-Bank – have discussed the setting up of such subsidiaries and applying for a forex brokerage license from the Bank of Russia. This would be a logical move, considering that the banks trading in forex by using legal loopholes, don’t have a representative body for their interests, after the National Fund Association (NFA) failed to obtain a forex SRO license. The reason for the refusal was that the organization has other members such as banks and other participants on the securities market.