Russian Central Bank Ends FX Competition

The Central Bank of the Russian Federation (CBR) announced that it has revoked the licenses of five Russian foreign exchange (FX) trading companies. According to a statement on the bank’s website, the decision was made due to “the repeated violations of the requirements of the Russian legislation on securities within one year.”

The five companies — Forex Club, Alpari Forex, Trust Forex, InstaForex and TeleTrade — will see their licenses expire on Jan. 27, and must stop all operations and return funds to their customers by that time.

The move will give major local banks control of the market. As UrduPoint reported, only four companies will now hold an FX brokers license in Russia, including VTB Forex and Alpha-Forex, which are both affiliated with the country’s largest banks.

CBR’s Head of Securities Market and Commodity Market Department Larisa Selyutina has downplayed the decision, explaining that the companies losing their licenses have only 2,000 clients in Russia, since they are all subsidiaries of international companies.

“There are not so many direct customers of the companies under our supervision — 2,000 clients in total. Out of them, no more than 470 are active, those who [have] made at least one deal within a month,” said Selyutina.

For its part, Alpari Forex is not going down without a fight, and is prepared to challenge CBR’s decision in court.

“Until now, Alpari Forex, which is the Russian legal entity for the Alpari brand, has not received any official notification from the Russian regulator about the revocation of the license, and continues to serve clients in full compliance with Russian legislation. Upon receipt of the notification, the Russian legal entity will act in full compliance with the legislation of [Russia] and will appeal the decision of the regulator in a manner prescribed by law,” according to a corporate statement.