Fix Trade, the parent company of online FX brokerage InstaForex has sued the Bank of Russia for “illegally” revoking its operating license, Forex Magnates Russia reported.
The Kaliningrad-based brokerage was among five foreign exchange dealers operating in the country that saw their licenses revoked last month. The list includes Alpari Forex, Forex Club, Fix Trade, Trustforex, and Teletrade Group and the decision came into force on January 27.
Fix Trade filed the case at the Moscow Arbitration Court. It asks the court to declare the purported revocation null and void as the company didn’t violate the basic provisions of Russian law. Alpari is also preparing to appeal the decision to suspend its license, which requires the broker to cease operations in Russia’s securities market and pay off their customers.
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The official reasons behind the move were that InstaForex and other brokers had been using aggressive advertising to lure Russian clients, providing false accounting data, mishandling risks and moving clients’ money offshore, among other violations.
Repeated violations of Russian law
In addition, the regulator canceled the qualification certificates of Fix Trade’s top managers, Dmitry Savchenko and Sergey Shevaldov. The Central Bank of Russia (CBR) says they failed to fulfill the regulator’s requirements, had flaws in internal accounting and presented inaccurate information or false reports.
The CBR also claims that Fix Trade and other brokers had few little clients through two years of their work as most of the Russian traders were sent to their unlicensed subsidiaries.
The regulator said announcing the measure last month: “The Bank of Russia decided to revoke the license of a professional participant in the securities market to engage in the activity of a forex dealer issued by Fix Trade LLC. The reason for the decision was the repeated violations of the Russian legislation on securities during one year, namely: violation of the procedure and period for disclosing information on the Company’s website on the Internet, failure (improper execution) of the prescriptions and requirements of the Bank of Russia, violation of licensing requirements, improper organization of risk management system. The licenses expire on January 27, 2019. ”