It appears that common sense has prevailed and Russia’s parliament did not approve the controversial amendments on the forex market regulations that got in turmoil the forex brokers in the country over the past months, reports the Russian site Vedomosti.
The amendments to the law on financial markets in its part on the self-regulation of the financial markets were made between the first and the second reading in parliament. They provided for a number of serious limitations on the activities of the forex brokers, including the requirement that they accept as clients only “qualified investors”. – A person with a university diploma in economics, at leas two years of experience in trading and own capital of no less than RUB 6 million (around $90 000). This in practice would have excluded the general public from the list of potential retail forex traders and would have limit the investment opportunities to the wealthy.
Another amendment that did not pass was granting the Bank of Russia the right to ban the internet access to the websites of those brokers who do not have a Russian license.
According to sources of Vedomosti among the forex brokers operating in the country, their stance was supported by the presidential administration. This ultimately resulted in the overruling of the controversial amendments during the final, third reading in Russia’s parliament, in spite the staunch support for the limitations from the MPs of second-largest party – the communists.
The overruling of the proposed amendments was welcomed by the forex brokers, reports Vedomosti, quoting Pavel Salas, representative of the Israeli-based social forex broker eToro. “The forex broker regulation in its current form provides enough investor protection,” Salas said.
Last year the average retail forex trading volume per month was $330 billion, generated by about active 460 000 traders on the platforms of the 100+ forex brokers operating in Russia. Currently there are three licensed forex brokers in Russia – Finam, TeleTrade and TrustForex. Recently the two largest ones – Alpari and ForexClub were refused Russian licenses and continue operating through offshore registrations, like the other brokers.