Russian Parliament Turns Down Forex Brokers Plea
- The association of regulated forex dealers was asking for streamlined client identification
The Russian Parliament has just dealt the latest blow to the regulated Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term industry in the country. A legislative effort started by the Association of Forex Dealers (AFD) was turned down.
The representatives have turned down a proposal set out by the brokers which were pleading for a less stringent client verification methodology.
Local media outlines that the governor of the Bank of Russia, Elvira Nabiulina has been very vocally opposed to the industry. The position of the Russian government and now parliament is confirming the stance of local authorities.
The legislative effort has been designed to counteract some tough anti-money laundering requirements. The document has been discussed in the Russian parliament since May 2018.
Offshore Brokers
The legislation which the Russian government introduced is clearing the way for offshore brokers to keep attracting clients from the country. The tough regulatory framework pushed businesses offshore and led to fewer protections for Russian citizens willing to trade forex.
A month after the new legislative effort has been introduced in the parliament, the Head of the Russian Central Bank, Nabiulina said that the central is opposing the measure.
The news is not unexpected as the Russian government has been consistently opposing the involvement of its citizens in high-risk Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term trading.
Russian companies are forbidden from identifying their clients remotely and need to confirm their identity in person. The operational costs of the brokerages are too high to maintain, and clients have been moving offshore ever since the regulation of the Russian market.
Money Laundering Concerns
Despite the vocal opposition of the central bank, the biggest concerns of Russian authorities are related to money laundering.
In a statement, Russian authorities clarified their position: “The introduction of remote identification of clients can be possible only when the risks for money laundering of illicitly obtained income is eliminated.”
The Russian parliament also highlighted risks related to terrorism financing when clarifying its decision.
The Russian Parliament has just dealt the latest blow to the regulated Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term industry in the country. A legislative effort started by the Association of Forex Dealers (AFD) was turned down.
The representatives have turned down a proposal set out by the brokers which were pleading for a less stringent client verification methodology.
Local media outlines that the governor of the Bank of Russia, Elvira Nabiulina has been very vocally opposed to the industry. The position of the Russian government and now parliament is confirming the stance of local authorities.
The legislative effort has been designed to counteract some tough anti-money laundering requirements. The document has been discussed in the Russian parliament since May 2018.
Offshore Brokers
The legislation which the Russian government introduced is clearing the way for offshore brokers to keep attracting clients from the country. The tough regulatory framework pushed businesses offshore and led to fewer protections for Russian citizens willing to trade forex.
A month after the new legislative effort has been introduced in the parliament, the Head of the Russian Central Bank, Nabiulina said that the central is opposing the measure.
The news is not unexpected as the Russian government has been consistently opposing the involvement of its citizens in high-risk Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term trading.
Russian companies are forbidden from identifying their clients remotely and need to confirm their identity in person. The operational costs of the brokerages are too high to maintain, and clients have been moving offshore ever since the regulation of the Russian market.
Money Laundering Concerns
Despite the vocal opposition of the central bank, the biggest concerns of Russian authorities are related to money laundering.
In a statement, Russian authorities clarified their position: “The introduction of remote identification of clients can be possible only when the risks for money laundering of illicitly obtained income is eliminated.”
The Russian parliament also highlighted risks related to terrorism financing when clarifying its decision.