A Russian Forex Industry Roundtable

Among the most populous countries in the world, Russia represents one of the largest retail forex markets. It’s also the source for much of retail markets' technology, headed by leading platform provider MetaQuotes. The Russian market was especially important in the just ended third-quarter, as it reported growth during an otherwise slow period of trading across the globe. However, with all the prospects of the nation, the country has also been a difficult market to crack by foreigners. Many a tale exists of foreign brokers opening local offices only to see them fold due to being duped by local partners or underestimating expenses.

To understand more about the country, in the latest Forex Magnates Quarterly Industry Report, we conducted a roundtable of professionals in the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market to learn about the size of the market, characteristics of its traders, opportunities for both Russian and foreign brokers in the country, and most importantly - what’s the deal with regulation.

To gauge a wide array of opinions we spoke with Peter Tatarnikov, CEO of forex consulting group GFF CORP, Ilya Volkov, Member of the Representative Board of CRFIN, Managing Director of Forex Club (Russia), Mikhail Berman, Business Development Director at Devexperts and Arthur Shponko, Open API Division Manager at Finam.

Some of the key findings of the roundtable:

Regulation – It’s coming. The overriding opinion is sometime in 2014. In terms of foreign brokers, regulation is expected to make it easier to enter the market as it provides a uniform financial structure for operating in Russia.

Technology – Since the infancy of the retail forex market that more or less really began at the turn of the millennium, Russia has been a leader in creating technological products for the industry. In addition to the well-known MetaTrader platform, Russia is also a hub for outsourcing of technology development of industry software. But, support and quality of products created in the country have often been questioned. One solution would be, before contracting a provider, is to ask how the firm plans to create the products you are seeking, then simply review past achievements.

FX vs other assets – Despite the lack of regulation, forex isn’t viewed negatively in the market. Yes, there have been firms that defrauded clients, but in general, currency trading is an understood asset class that is accepted by the public. For the industry this creates long-term value as traders are likely to continue sticking with the asset.

Autotrading – Thanks to Alpari, and the creation of PAMM account, autotrading is a hot commodity in Russia. One of the reasons is that unlike mutual funds, traders feel they have more control with PAMMs as they can control allocation and can connect or disconnect from any manager at any time. In this regard, social trading, which adds an element of interaction and personal ties, is expected to do well in Russia. Specifically, social trading has the means to attract investors that may require more of a one-on-one approach to autotrading.

Other topics in the roundtable included advice to brokers trying to enter the market, size of the market, main trends, and what Russian brokers are interested in from foreign Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and technology providers.

To read the entire article please check out our Q3 2013 Quarterly Industry Report

In addition to this article, Forex Magnates offers its readers an up-to-date, detailed and useful research into the Russian forex market.