The Central Bank of Russia has signed a statement of commitment to the FX Global Code of Conduct, which was developed by a partnership between central banks and market participants to enhance discipline in the foreign exchange market.
The country’s mega regulator joins a number of key adopters who have pledged to adhere to the code’s principles, which aim to reform conduct and behavior in foreign exchange and develop a renewed sense of trust in the sector.
By signing a statement of commitment, the Russian central bank acknowledges that the principles outlined in the Code represent a series of best practices to promote a transparent FX market.
The official statement further reads: “The Bank of Russia has announced that it is committed to the principles of the FX Global Code after comparing the code provisions, the norms of the legislation of the Russian Federation, and its own business processes.”
The FX Global Code consists of 55 principles of good practices that will function as a guide to ethical behavior in the FX market. Published in May 2017, the initiative emphasizes the growing need for transparency in the industry execution and governance.
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After lengthy industry collaboration and planning, the document will help foster more robust, fair, liquid, open, and appropriately transparent marketplaces, where different market participants are actively supported by a resilient infrastructure.
Russia Cracks Down on FX Industry
On the retail side, the Bank of Russia eliminated competition from the entire forex market in the country after it decided to strip several brokerage firms of their license to trade in forex. Most of the foreign exchange dealers operating in the country saw their licenses revoked over the last two years. The list includes Alpari Forex, Forex Club, Fix Trade, Trustforex and Teletrade Group.
The official reason behind the move was that brokers had been using aggressive advertising tactics to lure Russian clients, providing false accounting data, mishandling risks and moving clients’ money offshore, among other violations.
However, this move effectively eliminated forex traders from the retail market and put the business into the hands of local big banks.
More broadly, the Russian Central Bank says that fewer Russians are now involved in illegal financial schemes. At the same time, the regulator has seen a notable increase in opening trading accounts with legal providers, for example, on domestic exchanges.