Bank of Russia Restarts Licensing FX Brokers

It’s been a while since we’ve covered a new regulatory license in Russia. In fact, the last time the regulator handed out an official permit to a company from the forex industry was in April 2017.

Just as we were wondering whether the Bank of Russia has become risk-averse and hence even more conservative towards the forex industry, one of the oldest brokers on the local market got its permit.

Alfa Forex has just become the ninth company which is regulated by the Russian central bank. The news came in an official press release published by the regulator that is based in Moscow.

In late October, the Russian watchdog stated that it is looking at a 30:1 leverage cap. With the speed at which EU clients are moving offshore after the introduction of the new leverage cap in August, it would be a surprise if Russian traders behave in a different manner.

New License After a Long While

The regulated Russian market has been largely centralised. Several companies which are offering its services in the country chose to offer their services via offshore subsidiaries.

One such company used to be Alfa Forex, which until recently was accepting Russian clients via its Cypriot subsidiary called Alfa Capital Holdings (Cyprus) Limited.

“One the 20th of December, the Bank of Russia took a decision to grant a professional forex dealer license to Alfa Forex (Moscow) LLC,” the official announcement states.

Alfa Forex applied for a new regulatory permit with the Russian regulator in May this year. At the time, the brokerage company stopped offering its services to Russian citizens through its Cypriot subsidiary.

The company will be allowed to onboard clients in Russia after becoming a member of the Association of Forex Dealers (AFD). The membership in the industry’s official self-regulatory body in a must for all companies that are willing to house local clients.

The capital requirements for a Russian license amount to RUB 100 million ($1.5 million). A set of additional obligations related to the company’s staff members, qualifications criteria and other mechanisms for detailed supervision of the business are also a must for all regulated firms.

(Photo: pixabay)

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