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Foreign exchange in Russia is overseen by the Central Bank of Russia which has the authority to issue special foreign exchange licenses to commercial banking institutions. The first regulations concerning online Forex trading were drafted in 2008 by the local financial activities regulator the Federal Financial Markets Service. The law came into effect and the first licensed Forex brokerages were announced in 2016. The Russian regulatory body enforces strict rules in order to provide transparency and avoid risk – an example is the newly-put limit on the maximum possible leverage a brokerage may offer – 1:50. Companies also have to secure a minimum capital of 100 million RUB (about $1.5 mln).
Due to such strict requirements only 8 companies in Russia are eligible for a forex trading license and most of the trading is done through foreign brokerages. Those registered and regulated by European authorities such as CySec and the UK’s FCA are the most sought after by clients due to their safety mechanisms and transparency.
Specifically forex trading in Russia is also regulated by an independent non-government organization founded in 2011 by a Russian broker with the intent of providing independent verification of the legitimacy of Forex brokers operating in Russia. It’s called the FMRRC and it is not affiliated in any way with the main authorities. It operates within an informal set of rules and regulations that are aimed to act as trust-creators between interested traders and firms in Russia.
It has the power to issue licenses and revoke them in cases where rules are broken and standards are not kept, however, it does not have any power to take legal action in case of fraud. It merely acts as an unbiased regulator which is not tied up with the government of the country. The website is very informative and is also available in English. It is a more or less a successful attempt at self-regulation by the Forex brokers in the country. Echoing the best regulators in Europe, the Financial Market Relations Regulation Center also offers clients fallen victim to scamming a financial mechanism by which at least part of their funds may be recovered.
However, traders should also take notice whether the brokerage has a license issued by the official authorities as well in order to best avoid unnecessary risks.
Interestingly enough, Russia is an example of an online market where credit/debit cards are not the widely preferred payment methods. In fact, Russian traders use mostly e-wallets with Yandex.money and QIWI being the most popular and online banking with Sberbank being the biggest bank with 40 millions of users.
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