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Recent developments in the regulation of Forex in Russia
Russian Forex from the point of view of state regulation remains a gray area already for about 20 years, despite fast-paced growth of this market in the country. Suffice it to recall that the Moscow Exchange has set three record daily trading volumes in April 2013, or that a recent study by Daphnis Group have identified Russia as the leader in binary options trading.
In the end, it became obvious that apart from "bloom", and since this market is booming, of course, the situation with the "regulatory" point of view will also have to change.
The wheels are already in motion and changes in the legislation on Forex started with a bill titled "ON AMENDMENTS TO the FEDERAL LAW "ON SECURITIES MARKET"". As its name suggests, it provides legislative reforms that will allow state regulation of the Forex industry in Russia.
This act contains some pretty important definitions, including Forex and as such activity on Forex. He also suggests that the participants in the FX market should be treated as dealers, and therefore, they will have to get a dealer license and should have minimum required net capital of 35 million rubles (approximately $1.1 million). The last one of bad news for smaller players in the market, as many of them may be unable to meet this requirement.
The cost for joining the official Russian broker is not limited to: as administrative expenses (5 400 rubles) for obtaining a license dealer, and then have to pay fees for participation in the self-regulatory organization (SRO) fee for joining the SRO, the monthly fee for participation and contribution to the compensation Fund.
But the tricky question in all this - what kind of reputable government organisation is responsible for the regulation in Forex: the truth, according to the act, the Forex sector will monitor the Federal securities Commission (FCSM), but his obligations should subsequently be transferred to future mega-regulator on the Russian financial markets. One may wonder, what will it be for the "watchdog" – he should assume the functions of control over a very large number of institutions and must be learned (surprise!) The Central Bank of Russia.
Contrary to expectations, the establishment of the new regulator and the transfer of all powers from other agencies and commissions should be a relatively short process that is expected to be completed in not more than two years.
The bill is already in the list for discussion by the Russian Duma (lower house of Parliament), and its representatives consider it.
Raised another important issue for Forex companies in Russia - the question of taxes. The draft law "On amending the Federal Law on the securities market and other legislative acts of the Russian Federation" stipulates that the Forex sector will have to pay income tax, which should bring about 1 billion rubles (approximately $32 million) during the first three years after the introduction of the new law. There are no options to avoid tax and individuals involved in Forex they will have to pay personal income tax.
The advantage is that the new law will allow the netting of all types of foreign exchange derivatives, including those traded on the OTC securities market – which is not permitted in Russia at present. This will help OTC trading to become as competitive as in the case of official stock exchanges, at least from the point of view of the offsets. Add to the benefits of regulatory reforms that will now be available legal protection for the participants of the Forex sector affected by illegal operations.The bill also proposes the court of arbitration to resolve disputes in the market Forex.
It is important to remember that Forex brokers in Russia for a long time lobbied for state regulation in the segment because they hope that it will improve their business image and attract more customers. In the meantime, this sector must rely on government bodies, such as the Agency for financial regulation (FRA, or honest broker).
We expect further developments: the law on state regulation of Forex will enter into force on 1 January 2014.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 263
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