Recently, the Association of Forex Dealers (AFD) sent an open letter to the Central Bank of the Russian Federation with an initiative to review the process of blocking websites of foreign companies that provide services for trading OTC financial instruments to residents of the Russian Federation. The stumbling block was the fact that any resource of a foreign broker can be blocked by a decision of any Russian court. At the same time, no one will notify the dealer about the court session, depriving the broker of the opportunity to participate in order to protect their interests. The court decision is sent to Roskomnadzor (Federal Service for Supervision of Communications, Information Technology and Mass Media) and the resource is blocked for Russian users. Of course, this is an effective tool in the fight against openly unscrupulous brokers, phishing sites and outright scams, but for dealers who work openly and in accordance with the requirements of self-regulating organizations, this practice jeopardizes the ability to offer services to Russian traders who are used to working with foreign companies.
We have reached out to Valdis Gabris, head of Bytrend’s legal department (bytrend.com) for comment:
The Bytrend.com brand sees the regulator’s actions as an attempt to protect the Russian market segment from foreign brokers. In its opinion, this is done not so much to protect the interests of citizens from various types of risky investments, but rather to clean up the market, preparing a fertile ground for banks. It is no secret that today many Russian banks offer the opportunity to trade on the foreign exchange market. However, it turns out to be clumsy, so the number of clients of the “Bank” Forex is negligible. The banks themselves are squeezed by the restrictions that are prescribed in the law on regulating Forex dealers and, in comparison with them, the conditions of foreign companies certainly seem to Russian players much more attractive. These include large margin levers, flexible loyalty programs, and the speed and quality of customer service. This fact does not allow banks to effectively develop their “own” market in the current realities.
At the moment, the bill, which has already passed its first reading in the state Duma, will allow the regulator to block the websites of foreign companies at the pre-trial stage. As stated, the bill will help to quickly combat phishing services, sites of scams and dealers without licenses of the Russian Federation, although initially the Russian user is not prohibited by the law from working with foreign brokers. If the bill is still adopted, the Central Bank receives a tool for pre-trial blocking of any resource that considers inappropriate for the representatives of the regulator.
Bytrend.com (By trend broker) thinks that this bill is created for the sole purpose of closing access to Russian users to the services of foreign dealers, as well as closing a segment of the Russian market to foreign dealers. This encourages the development of domestic demand for the services of licensed local dealers, as well as an increase in the number of banks licensed in Forex, but will this lead to the development of the market itself? This is a question without an answer. The opinion of Bytrend broker is that this is a dead end branch for the development of the local segment of the currency market in a single state.
