Russian-based forex broker, FBS, has announced that they have received membership into the country’s forex self-regulating organization (SRO), CRFIN. Aiming to bring forex activities under Russian financial regulation, CRFIN acts as both an industry lobby group as well as creating a framework of rules for member brokers. Membership in the SRO is currently held by virtually all of the country’s leading forex brokers as part of their efforts to help legitimize forex trading in Russia.
In terms of FBS, the broker has been around since the early 2000’s, and is among a group of early Russian firms that were active in bringing forex services to Southeast Asian countries and African. Without developed capital market infrastructures, forex brokers entering these countries were viewed as providing market leading trading conditions compared to local products. This was the case even as spreads would be considered wide by industry standards. For FBS, foreign expansion was aimed at Southeast Asia. Within Indonesia specifically they are known as being an early entrant and created localized products for the market.
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Recently though, FBS, along with other foreign firms had a tougher time in Southeast Asia as regulators have taken stronger stances to limit, or at times ban forex trading altogether. Examples include Malaysia’s Central Bank (MAS) issuing a ban on foreign brokers as well as the Reserve Bank of India directing banks to prohibit credit transactions with forex companies. Following on this trend, Indonesia’s government implemented IP restrictions to block websites of forex related portals and brokers from being viewed in the country. Among the blocked list included six sites being marketed as properties or affiliates of FBS. While the IP blocks can be circumvented via VPNs and web IP proxy products, the restrictions create a negative bias towards foreign firms. As a result, without holding any form of financial regulation, FBS’s decision to become members of CRFIN may be tied with the recent negativity in Southeast Asia towards forex companies. While not a government-
affiliated SRO, CRFIN membership does provide some level of recognition for approved firms as broker members are expected to follow the group’s standards.