Kaliningrad-headquartered broker InstaForex announced the suspension of its cooperation with Russian self-regulatory body KROUFR less than two months after joining the organization.
Just on the 6th of February this year, InstaForex, the international brand most well-known in Russia and other post-Soviet states has announced it is joining KROUFR in a move that was meant to improve the credibility of the broker with clients.
By joining the KROUFR , InstaForex traders were able to submit to the commission claims against the broker in cases they thought it acted unfairly. But, on the 31st of March InstaForex quit its participation.
“Such a decision was due to fundamentally different views on the fulfillment of the Public Offer Agreement in the aspects not regulated by the existing legislation and therefore allowing different opinions. The suspension of KROUFR membership will give time to form a single position on the issue of fulfillment of all clauses of the Agreement that is considered by the Commission as the base of legal relationship regulation with clients in case a company becomes its member,” InstaForex said.
The broker added that it will continue to cooperate with the Russian public organization union of consumers of financial services (FinPotrebSoyuz), which “enables every client to send a claim to the company for consideration of FinPotrebSouz’ experts and to settle the claim through their intermediary.”
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FinPotrebSoyuz is not a very well known body in the Russian forex industry and its ability to handle complex cases such as negative slippage or requotes is doubtful.
It is not immediately clear what is the real reason for InstaForex’s quick turnaround but a source close to the matter said that KROUFR got a number of complaints against the broker and after one case was decided against it, InstaForex might have feared its membership will cost it more than it bargained for.
After InstaForex’s announcement KROUFR commented: “We are studying the situation to prevent misunderstandings between the Company and members of the Board of Arbitration in the future.”
“In this case, we want to note that the professionalism and high level of competence of the Commission to ensure the independence and objective review of all claims received by us. As well as providing professional advice to companies forming part of KROUFR. This allows them to provide their clients with the highest level of trading conditions, in comparison with competitors who do not cooperate with any self-regulatory organizations.”