The Russian based brokerage firm InstaForex has announced the suspension of its co-operative alliance with KROUFR. To have a better understanding of KROUFR, the regulatory body describes itself as: “Commission for the regulation of relations in the financial markets, initiated by leading representatives of the Forex industry and reputable traders”. The self regulatory body clarifies its core activities as folllow:
- Coordination of participants within the global financial markets, whilst ensuring the terms for their activity;
- Facilitation in mitigation of risks carried by participants of global financial markets;
- Elaboration and facilitation in the introduction of rules and standards for operations conducted on global financial markets including principles of business ethics, fair competition, dispute settlement between participants of global financial markets;
- Facilitation in the improvement of performance of participants of global financial markets;
InstaForex, joined KROUFR on the 6th of Februrary 2015, with the intention to improve its credibility in the industry by adding more regulations to its books. Apparently, InstaForex doubted about the popularity of the membership with the Russian based self regulatory body, in the given short period. As Instaforex stated that the regulatory body is not well known in Russia Forex industry. Furthermore, the brokerage indicates that KROUFR’s ability to handle complex cases relating to FX markets, such as negative slippage or requites, is doubtful.
The rules of the membership states that traders of InstaForex can submit to the commission, claims which against the broker in scenarios of perceived unfair treatment. But as of 31st of March, after solely one month, InstaForex exits KROUFR without informing the regulatory body in advance. InstaForex unilaterally quits its participation with an assurance of continued cooperation with all relevant bodies or authorities in Russia.
In an explanatory statement of InstaForex, the following has been outlined: “Such a decision was due to fundamentally different views on the fulfillment of the Public Offer Agreement in the aspects not regulated by the existing legislation and therefore allowing different opinions. The suspension of KROUFR membership will give time to form a single position on the issue of fulfillment of all clauses of the Agreement that is considered by the Commission as the base of legal relationship regulation with clients in case a company becomes its member,”
On the other hand, KROUFR has clarified that they are studying the situation, in order to prevent any misunderstanding between the company and any member of the Board of Arbitration for the near future.