In its latest attempt to ensure the safety of financial markets, the Cyprus Securities and Exchange Commission, CySEC warns CIFs about offering their services in Russia. What are the requirements that are set out by the Cypriot regulator?
4 June, AtoZ Markets – The Cyprus Securities and Exchange Commission (CySEC), the major financial regulator of Cypriot markets, has issued a warning on its official website, thus urging Forex brokers regulated in Europe to obtain a license from the Central Bank of Russia (CBR) before offering their services to clients in that country.
CySEC Warns CIFs about Offering Their Services in Russia
In accordance with the EU regulatory framework for financial services, brokers are only permitted to operate within the territory of Russia that is approved for them. Below is the official announcement from the CySEC, which has outlined the new requirements for CIFs that wish to operate in Russia:
· Pursuant to Article 51, Section 6.1 of the Federal Law, No. 39-FZ, of 22 April 1996 on Securities Market, foreign entities, their representatives and branches are not authorised to provide and/or perform activities of non-credit financial organisations, inter alia activity of professional securities market participants, as well as provide services of foreign entities in financial markets to unlimited number of persons on the territory of the Russian Federation or disseminate information regarding the said entities and/or their activity among unlimited number of persons on the territory of the Russian Federation.
· Therefore, CIFs must prevent and retain from actions related to misconduct, inter alia from actions aimed at concluding, in the territory of the Russian Federation, agreements/contracts for the provision of investment services and/or the performance of investment activities.
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· CIFs may visit CBR’s website to read more information on the aforementioned provisions.
In her concluding statement, the Chairman of CySEC, Demetra Kalogerou said that regulated firms should consult with Russian authorities first. they need to verify ways of legally offering their services to clients in the country.
Why Russia Attacked Its Own Internet
Meanwhile, ad campaigns from foreign unlicensed brokers haven't escaped the notice of the Association of Forex Dealers (AFD), a self-regulating organization of Forex dealers. This local watchdog is stepping up its oversight as it keeps informing Russian authorities about this activity.
Not so long ago, Yandex, the leading search engine in Russia was charged for promoting ad campaigns from foreign unregulated brokers. After losing the first trial, the company currently awaits the court's final decision on the second lawsuit. While that is pending, Yandex has been slammed with a third court case.
As for the Google, broker clients are required to provide the company with proof that they are in compliance with CBR’s new regulatory requirements before offering their services in Russia. In spite of all this, many offshore firms are undeterred as they continue to have Russia residents as their target.
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