May 31, 2019, | AtoZ Markets - Since the beginning of April, four more Forex brokers have received a regulatory license in Belarus, taking the total number of brokers regulated in the country to 13. Overall there are 13 brokers and 2 banks that operate as retail forex brokers in one FX market regulatory framework. It seems that the Belarusian Forex market expands. Atoz Markets managed to reach out one of the Belarussia-based retail brokers to get an inside view of the Forex market legislation in the country and also clarify what makes Belarus so attractive for the Forex brokers.
Belarusian Forex market expands
On March 7, 2016, Decree 231 “On the implementation of activities in the OTC Forex market” came into force. After the decree came into force, activities in Belarus to carry out operations in the over-the-counter Forex market may be performed only by legal entities registered in the Republic of Belarus and included by the National Bank in the register of forex companies.
In February 2019, Chairman of the Financial Market Development Association in Belarus, Alexey Sidorov, announced that over the past year, the attractiveness of the Belarusian market has experienced significant growth.
In particular, according to him, some companies are leaving Cyprus and are now considering new attractive markets, including the financial market of the country. This could explain the expanding number of foreign organizations with which Belarusian Forex companies can interact when hedging risks. In addition, requirements for the number of deductions to security accounts of Forex companies were relaxed.
Sidorov recalls that the client base in Forex industry over the past year has increased three and a half times, and the membership of the Association has been replenished with three new members with investors from Cyprus, Panama and Hong Kong.
Is Belarus better than Russia for Forex brokers?
One of the managers of a brokerage firm that applied for a license, who wished to remain anonymous, said that a sudden growth of the number of Forex brokers in Belarus was connected with events in Russia.
Notable, that in December 2018, the Russian information agency announced that the Central Bank of Russia revoked the licenses of the five largest Russian Forex dealers - Forex Club, Fix Trade, Trustforex, Alpari Forex, and Teletrade Group.
Central Bank stated that the licenses were revoked due to repeated following violations:
- violation of the procedure for maintaining internal accounting;
- violation of the requirements for the ratio of the volume of security provided by individuals to the company;
- violation of reporting procedures and the provision of false reports; violation of the organization of the risk management system;
- violation of the procedure for calculating cash;
- disclosure of inaccurate information on the company website.
The Russian authorities allegedly forced to close all brokerage companies in the country. According to local media, at the moment only three large banks, all of which have connections with the government, can now provide trade using borrowed funds for retail customers.
Interview: Forex Club's path in the Belarusian Forex market
Forex Club has b, For more insights on the Belarusian Forex market, AtoZ Markets' team has interviewed Michael Geiger, the CEO of Libertex Group. As part of the Libertex Group, Forex Club has been in the Belarusian market since 2016.
During the interview, Michael Geiger has provided his opinion on the current state of the Forex brokers in Belarus. The CEO of the Libertex Group was asked, if the attitude of the Belarusian government toward retail brokers is more positive compared to any other global regulators. Michael Geiger commented:
"The Belarus regulation is the best reflection of an attitude of the Belorussian government to the retail Forex market. We consider this regulation as one of the most relevant regulations of the Forex market, not only among all CIS countries but also among other world jurisdictions. It was a logical step for Forex Club not only to be one of the leading Forex companies in CIS countries but to also be a leading company of the regulated Belorussian market. And in 2016, Forex Club became one of the first regulated Forex companies in Belarus."
The requirements to Forex brokers in Belarus
The CEO of the Libertex Group, was then asked, whether the sudden interest taken in brokers in Belarus is due to the Russian government, which is putting stricter regulations on the FX Market:
“There are several minimum requirements for Belorussian Forex companies to become a regulated Forex company in Belarus. First of all, they must be a Belorussian legal entity with net assets worth near to 100,000 USD. Next, it is required to transfer the first deposit of 55,000 USD, plus a sum equal to 5% of the clients’ deposits, to a guarantee fund. Lastly, these companies must transfer a sum equal to 50% of Belorussian residents deposits and 25% of non-residents deposits to a special account. These requirements are softer than in Russia for example, where a Forex company must have net assets of approximately 1.9 Mio USD and also transfer some funds to a guarantee fund in a self-regulating organization.”
Benefits of Forex brokers in Belarus
“Belarus regulation allows Forex companies to provide leverage from 1:100 to the private traders who are not professional ones. Leverage from 1:200 is available for professional traders. Forex companies can even provide a 1:500 leverage, but only for self-regulating Belorussians who are considered as professional financial market participants. Private traders are exempted from taxation in Belarus for their Forex market profits until the end of 2019.
Regulated Forex companies are allowed to provide the trade of Forex instruments and CDFs. These regulatory requirements are also softer compared to the ones in Russia, where Forex companies are only able to provide FX instruments with a leverage up to 1:50. Moreover, in Russia, Forex traders have no tax exemption, making Belarussian jurisdiction more interesting, not only for companies but also for private traders.”
Concluding the interview with Michael Geiger, our team asked how Forex Club stands out in the Belarusian market:
“Forex Club is one of the leading Forex companies in Belarus. Having more than 20 years of experience in the market, we provide traders with high-class service. We provide a vast variety of instruments from regular FX instruments to utilities, metals, stocks, and indices. Our cutting-edge platform Libertex was recognized by the Forex EXPO Awards as the best trading platform, and Global Banking and Finance Review named it the best trading application in the EAEU. The Belarussian National Forex Center, a subsidiary of Belorussian currency and stock exchange, has considered the Belorussian Forex Club as a leading company in terms of clients operations from 2016 to 2018. “
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