eToro is suspending its foreign exchange offering in Russia, Finance Magnates can confirm. The company sent out an official email to its Russian clients, informing them of the upcoming changes. The company will cease offering FX trading starting from tomorrow, the 13th of September.
The changes are a consequence of the official implementation of a new regulatory framework for the provision of rolling spot FX in Russia. After years of deliberations, Russian authorities have mandated the licensing of companies that are willing to provide margin FX in the country. So far only eight companies have obtained licensing, none of which are EU-based brokerage houses.
The social trading provider will retain for its Russian clients order execution in other asset classes. Customers will continue to be able to trade CFDs on commodities, shares and cryptocurrencies.
eToro highlights that the limitation does not include positions that are already open. Clients will be able to hold their already open positions as long as they deem necessary.
Clients will continue to be able to monitor quotes on the currency market as well as publicly discuss their trading ideas on FX.
The news comes a year and a half after Russian Sberbank announced a partnership deal with eToro. The companies formed a joint venture which is designed to offer social trading services to a pool of clients of the Russian bank. Back in 2014, the venture capital arm of the Russian bank provided the company with funding in tandem with Chinese investors.
Yoni Assia, co-founder and CEO at eToro noted: “We understand the need for regulation of new and innovative financial products, such as cryptocurrencies and social trading. eToro looks forward to sharing its knowledge with Sberbank and The Central Bank of the Russian Federation (CBR) in order to create a framework to support innovation. In the meantime we will be removing our support for FX trading in Russia.”