According to a statement from the Russian self-regulatory organization AFD (Association of Forex Dealers), Russian authorities are taking legal action against local search engine Yandex. The company is getting charged because it facilitated the advertisement of foreign forex brokers which are not regulated by the Bank of Russia.
This is the third case of the AFD against Yandex after it lost the first trial and still is awaiting the final decision of the court on the second one. The self-regulatory organization includes all of the brokerage’s that are regulated in Russia and are allowed to target Russian clients.
The AFD is actively campaigning to discourage foreign companies from operating in Russia. As part of the effort, it is undertaking legal action against companies that are marketing their products in the country using search engines.
The Russian regulators have been sanctioned by the AFD only to take action against firms that used Yandex so far.
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Foreign Brokers Going Around the Rules
Brokers which are targeting Russian residents are already actively diversifying their marketing efforts in the country. Aside from using affiliate websites which are not directly advertising forex and CFDs trading, brokers which are keen to operate in Russia typically have an offshore subsidiary which is not bound by the rules that apply to EU-regulated firms.
The court proceedings on the new case against Yandex are scheduled for the 15th of May. In the meantime, the AFD elaborates that the advertising efforts of the firms have been executed during the autumn of 2017.
The graphic advertisement verbatim stated: “High-precision execution, watch a video, trading CFDs carries a high risk.”
According to the AFD, the content of the ad is sufficient to determine that the product that is being advertised is forex trading. The ads have been posted by companies which are not allowed to advertise in Russia.
Brokers have been smart about going around the marketing regulations in Russia by advertising webinars, seminars and video lessons instead of direct trading services. Recently, a marketing ban from Google has been widely discussed by the industry. Insiders shared with Finance Magnates that there are numerous ways to go around the new rules.