Russian Forex Brokers

Russian Forex Brokers: Rules and Regulations

Screen Shot 2015-01-12 at 14.38.51The Russian retail forex industry has grown from a few hundred traders to more than a hundred thousand traders in a space of 20 years. With a well educated adult population which has a high risk appetite, Russia is a good place to trade forex.

The financial markets in Russia were hitherto regulated by the Federal Financial Markets Service (FFMS). However, this agency has now been incorporated into the Russian Central bank as of September 1 2013, making the apex bank the financial regulator in Russia.

Top 3 Russian Forex Brokers:

1
Min. Deposit
$10
Exclusive promotion
Our score
10
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
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Description:
LonghornFX is a true ECN STP broker dedicated to delivering a superior trading experience to traders no matter their level of experience. Their services are based on transparency, innovation and efficiency, ensuring an unparalleled trading experience for all.
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
0% Commission Account
Low Spreads
Eco-Account Option
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Description:
CedarFX is an eco-conscious broker offering 0% commission trading on 170+ assets, including Forex, Cryptocurrency Pairs, Stocks, Indices and Commodities. With up to 1:500 leverage, no-fee transactions and low spreads, traders can make the most of their funds. CedarFX also offers an Eco Account option to support tree planting and sustainability projects.
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
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Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro offers a wide range of currency pairs and other trading instruments. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
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Description:
EagleFX is an online digital asset, Forex and CFD broker providing traders across the globe with cutting edge technology to trade the world’s markets. Our focus has been to change the way people trade Digital Assets and Forex. We are driven to provide traders with incredibly low-cost pricing across all Digital assets, FX, stocks, indices, commodities and futures along with industry-leading 24/7 live customer support.
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.
5
Min. Deposit
$200
Exclusive promotion
Our score
7.9
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
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Description:
BlackBull Markets is a top-tier, award-winning, and financially registered forex broker with a globally trusted presence. Operating since 2014, BlackBull Markets is now the fastest growing financial services business in New Zealand. We were founded with the goal of becoming the leading online Financial Technology and Foreign Exchange broker. BlackBull Markets is a true ECN, No Dealing Desk brokerage specializing in Forex, CFDs, Commodities, Fibre Optic Communications and Fintech solutions for a global clientele.
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand

Russia has a thriving local exchange, which is also an exchange where forex products are traded. Russia is also home to MetaQuotes Inc, the company behind the MetaTrader 4 platform which is used by more than 80% of all retail traders globally. This has also opened the door for the influx of several companies offering retail forex brokerage services. Many Russian forex brokers have created niches for themselves in the industry. Brokerages such as Alpari and FXOpen have grown to become global brands.

central bank of the russian federationBut while some companies have been doing well, there are others which have not done as well and indeed have been the subject of several controversies. Trust is still an issue with local Russian forex traders, and this is largely due to the inability of the financial market regulator to set regulations which are specific to the forex industry and distinct from the stock market and other markets in the region. Despite the decision by the Federal Financial Markets Service (FFMS) to create a new set of regulations for Russian firms offering forex brokerage services in 2008, the implementation of these regulations has not been to the desired level. In order to bypass some of these trust issues, many Russian forex brokers are seeking regulation from other jurisdictions with better regulatory clout. Cyprus seems to be a popular destination.

There have also been some new developments with regards to the effect of economic sanctions on the forex trading arena in Russia. These will be examined below.

State of Forex Regulation in Russia

Keith Goldson, a global marketing director at the Forex Club, cited a survey in a money market conference which stated that only 50 percent of Russians are financially literate. According to Grigory Birg, co-director of the InvestCafe think tank, forex trainings tend to downplay the risk element in forex and gear the FX marketing campaigns specifically to attract money into the trading platforms. These and other factors have led to a situation where Russia’s foreign exchange industry is viewed as a get-rich-quick market, with promises of making the kind of fortunes the Russian oligarchs are known for. It is worthy to note that gambling in casinos is officially banned in Russia, but the forex market seems to have created a new outlet for those with the gambling instinct, who also happen to be those with little financial education. These are the people who make easy pickings for scam brokers in the Russian forex industry.

Experts in the forex industry are agreed on one point: licensing is the only way forward. However, there are also fears that licensing would push the dishonest brokers out of the country, from where they can continue their marketing campaigns over the internet.

The sanctions imposed by the US and the European Union have also affected the industry. Trading on the USDRUB currency pair, which is the 10th most traded currency pair (according to the Bank of International Settlements), has been suspended on many platforms. Many Russians are starting to convert their Rubles to US Dollars so as to protect against the falling value of the local currency. There are fears that the government may introduce measures to stem against capital flight into other currencies or out of the country. This will have an impact on the businesses of Russian forex brokers.

But in terms of regulation of the forex brokers in Russia, what does the future hold?

The Future of Forex Regulation in Russia

The Central Bank of Russia has banned unofficial foreign exchange booths. Furthermore, a bill known as “Changes in the Federal Securities Market Law and Other Legislation of the Russian Federation” is being pushed through the legislature to reform the regulatory processes in the forex industry in Russia. This bill would change the definitions of activities in the forex market, aim to regulate participants in the forex brokerage industry as dealers, and require such dealers to obtain dealer licenses with a minimum capital requirement of RUB 35 million. This move is aimed at forcing smaller players to either merge, recapitalize or be forced out of the market, so that forex brokerage business is handled by companies with the financial capacity to settle investor claims. This capital requirement would also ensure that only firms with enough money to pay for the dealer licenses, self-regulating organization (SRO) fees, contributions to a compensation fund, would be allowed in the market.

The Central Bank of Russia is also to directly oversee the regulation of the forex industry in Russia, with all processes expected to be completed by 2015.

Taxation of the forex sector is also expected to take off in full swing. Forex brokers will have to pay taxes on profits made from their operations, and all individual forex traders are expected to declare their profitable earnings for the purpose of payment of new forex trading personal income tax.

Under the new law, other forms of forex derivatives, currently banned in Russia, would become legal and operational. Full legal protection for participants in the forex market is now guaranteed via a new arbitrage court to be setup.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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