Russian financial regulators have observed a continued downturn in complaints filed by customers regarding Forex dealers that provide licensed OTC FX services to Russian residents.
The Russian Central Bank did an analysis of complaints it has received in the first quarter of 2020 against financial services firms. According to the study, claims against securities brokers totaled only 293, which is almost four percent lower from a year earlier. Out of this figure, the mega regulator said a mere 0.3 percent of total complaints were from dissatisfied customers against OTC FX brokers, compared to 9 percent in Q1 2019.
In 2019, the central bank received nearly 1000 complaints throughout the year, which was lower than the 1,439 complaints it received in 2018.
It would be quite the understatement to say Russian investors’ interest in speculative products has been unwinding as a result of stringent FX regulations and the RCB’s efforts to limit the marketing of such products. A more accurate description for this drop in complaints would be something closer to the idea that long-standing clampdown is pushing traders away from licensed brokers in Russia to open accounts in offshore jurisdictions.
Russia’s central bank said last month it has spotted a notable increase in solicitations from unregulated brokers and specifically warned the public from doing business with forex platforms that promise an income stream during the Covid-19 lockdown.
FX scene has changed over the past few years
In a window lasting just a little over two years, the Bank of Russia eliminated competition from the entire forex market in the country after it decided to strip several brokerage firms of their license to trade in forex.
Russia has sought to crack down on both crypto and FX industries in recent months, which has long flocked to other jurisdictions. Part of its crackdown, which dates back to 2018, the Russian central bank identified 140 companies it says might be illegally offering FX trading to local consumers earlier last year.
More broadly, however, the Russian Central Bank says that fewer Russians are now involved in illegal financial schemes. At the same time, the regulator has seen a notable increase in opening trading accounts with legal providers, for example, on domestic exchanges.
According to a recent report from MOEX, more than 1 million retail investors flocked to Russia’s largest institutional trading venue in the first four months of 2020, opening twice as many accounts as the monthly average in the previous year.