14 August, AtoZForex – As the timing for the implementation of the Russian Forex law approaches, the Bank of Russia has taken further steps to fortify the rules in a bid to protect FX clients from broker’s activities. The Central Bank of Russia has announced that it has been working on a special project, with the primary aim of ensuring maximum investor protection, seeking to secure safeguards for clients.
About a month 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, 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
The new project from Bank of Russia is expected to take effect on April 20, 2015. The regulators specifically stated that: “The project is currently underway. A system of regulatory activity forex dealers and other professional participants of the financial market. An analysis of proposals from representatives of the financial market, in terms of improvement of the legislation.”
Other recent developments in this realm include effort from self regulatory body, CRFIN. In line with the organization’s mission of promoting effective mechanisms at the off-exchange segment of the Forex market, it has recently announced improved effort o enhance its internal structure and partnerships with state institutions.
This effort is deemed necessary to for development, transparency, civilized and convenient business environment and protection of interests for market participants, especially as the implementation process of the newly enacted Russian Forex law is about to commence by October 2015. One of the major requirements of the new FX law is that Forex brokers hoping to obtain licenses in the region have to become members of a Forex self-regulatory body.
The CRFIN also publicized that it is establishing three new committees to bolster its activities:
- Committee on legal issues of Forex companies;
- Committee on internal accounting;
- Committee on Forex software.