13 November, AtoZForex.com, Lagos – After an extended period of development, the Russian Forex law is finally in application. Forex dealers have now been given till January 2016 to obtain the license, or abstain from carrying out their services in the Russian region.
Tight timeframe
The timeframe for fully obtaining the license has been found too tight, prompting the Russian Forex market participants to solicit for an extension of the deadline from the the Bank of Russia. According to the apex bank, at the moment, market participants do not seem to have sufficient understanding of the procedure for licensing. The procedure for entry into the relevant self-regulatory organization (SRO) is also a cause of confusion.
This confusion is due to the fact there is no comprehensive regulatory framework, which would permit all legal actions and start of service. Additionally, there is a conflict on the terms of entry, therefore creating a lack of sufficient clarity as regards the entire process.
"In view of the above, there are significant risks that the bona fide market participants may not have time to implement all the necessary procedures in the statutory period," - the press service of VTB 24.
The Bank of Russia has clarified that the requirements of the Forex dealer license is in line with the established law "On the Securities Market" and the Bank of Russia regulations, with no obstacles to a license application.
Compensation fund
Some time back, the Bank of Russia published a draft normative act as regards the establishment of a compensation fund as a contingency in event of bankruptcy of licensed FX brokers. Similar to other Forex regulators of its kind operate in other jurisdictions, all Forex brokers in Russia will be under obligation of membership to a Forex self-regulatory organization (SRO) and this organization must setup a Compensation Fund. Membership will be made compulsory with an entry fee of RUB 2 million ($35,629), a refusal to duly adhere will result in license revocation by the authorities.
With the Russian Forex law now in place, and ready for administration, it is expected that the region will become a safer zone for traders and dealers alike.
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