Russian Brokers Wrap Up Operations in Wake of Regulatory Change
- The local regulator ordered five of the country's largest brokers to cease operations at the end of last year
Russia is a cold and wintry country in Eastern Europe ruled over by Vladimir Putin. It's also home to a government that is not amenable to the retail trading industry.
In fact, at the end of December 2018, the Central Bank of Russia effectively shut down the industry by forcing five of the countries regulated brokers, including Alpari and TeleTrade, to shut down.
Of course, the remaining brokers are all owned by major firms with, surprise surprise, close connections to the Russian government.
For their part, the Central Bank of Russia has said that the firms had repeatedly violated regulatory requirements and that authorities had grown tired of their behavior.
Amongst a litany of other alleged legal infringements, the regulator said that firms had not held adequate capital funds, violated accounting procedures, disclosed inaccurate information on their websites and failed to meet any Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, standards set by regulatory authorities.
Mission complete
After being given a month to cease operations, the Central Bank of Russia said on Tuesday that the five brokers had fulfilled their Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you to customers.
But that's not the end of things for the firms. No, they'll still have to submit an account of their winding up procedures to the Central Bank of Russia by the first day of February this year.
"Reports on the performance of obligations by companies as of January 27, 2019 should be submitted to the Bank of Russia on February 1, 2019," the regulator said in a statement on Monday.
That shouldn't be a problem for the affected brokers. Alpari, for instance, said that it had wrapped up its Russian operations last week. The same was true for TeleTrade.
As dramatic as all of this is, it's unlikely to actually change anything in Russia. An overwhelming majority of retail traders in the world's largest country use offshore brokers, meaning that a Russian regulatory license is fairly meaningless to them.
Russia is a cold and wintry country in Eastern Europe ruled over by Vladimir Putin. It's also home to a government that is not amenable to the retail trading industry.
In fact, at the end of December 2018, the Central Bank of Russia effectively shut down the industry by forcing five of the countries regulated brokers, including Alpari and TeleTrade, to shut down.
Of course, the remaining brokers are all owned by major firms with, surprise surprise, close connections to the Russian government.
For their part, the Central Bank of Russia has said that the firms had repeatedly violated regulatory requirements and that authorities had grown tired of their behavior.
Amongst a litany of other alleged legal infringements, the regulator said that firms had not held adequate capital funds, violated accounting procedures, disclosed inaccurate information on their websites and failed to meet any Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, standards set by regulatory authorities.
Mission complete
After being given a month to cease operations, the Central Bank of Russia said on Tuesday that the five brokers had fulfilled their Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you to customers.
But that's not the end of things for the firms. No, they'll still have to submit an account of their winding up procedures to the Central Bank of Russia by the first day of February this year.
"Reports on the performance of obligations by companies as of January 27, 2019 should be submitted to the Bank of Russia on February 1, 2019," the regulator said in a statement on Monday.
That shouldn't be a problem for the affected brokers. Alpari, for instance, said that it had wrapped up its Russian operations last week. The same was true for TeleTrade.
As dramatic as all of this is, it's unlikely to actually change anything in Russia. An overwhelming majority of retail traders in the world's largest country use offshore brokers, meaning that a Russian regulatory license is fairly meaningless to them.