Why was the law "On" not moved, and -dealers all as one ran for licenses?
As you know, the entry into force of the Law "On ", namely amendments to the Federal Law No. 39 "On the Securities Market" under Article 4.1 "Dealer activities" will not be postponed to 2017 and the law will take effect as previously agreed upon as of January 2016. Let's talk about why this did not happen.
Перенос закона «О » и ответный ход Банка России
In the year ending 2015, Russian companies actively promoted the idea that the market Forex in Russia is not yet ready to work in full force, the participants have not gone into details, and the legislative base is imperfect, and in some cases even absent. In particular, the instruction of the Bank of Russia containing the list of documents and their submission procedure for obtaining a license of the regulator was meant. Despite the fact that this instruction was approved by the Ministry of Justice only recently, its draft was on the website of the Bank of Russia long before that.
When market participants managed to lobby for the postponement of the law through the State Duma Committee on the Financial Market, which resulted in a letter from the Committee to the Bank of Russia proposing to postpone the law "On" for a year, the Central Bank did not object to this initiative at all. However, the regulator agreed to this step under certain conditions of its own, which puzzled the companies... The proposals from the Central Bank of Russia were so unexpected that they were subjected to a tripartite discussion by the State Duma Committee, the Bank of Russia and market participants themselves, but no consensus was reached. After that, the companies had no choice but to intensify their applications to the regulator for a license to carry out dealer activities, and the Bank of Russia itself accelerated the process of reviewing applications.
The reason for this abrupt change is quite simple: the conditions on which the Central Bank agreed to move the law "On " would have led to the disappearance of this market in Russia, as the stated requirements would have become completely uncompetitive!
3 conditions for destruction in the RF
First, the regulator wanted to make available for qualified investors only, которыми могут быть финансовые организации, например брокерские компании или кредитные организации, а также физические лица, торгующие на фондовом рынке и отвечающие ряду трудновыполнимых для обычного клиента -компании требований. Также в этот список могут быть внесены физические лица, которые предоставили доказательства того, что они могут считаться квалифицированными инвесторами. Такое изменение оттеснит 99% физических лиц от возможности торговли на рынке Forex и сделает бизнес для дилеров нерентабельным, а для участников — очень дорогим.
Second, the Bank of Russia proposed reduce leverage to 1:25. If in the approved version of the law "On" this value was 1:50, the regulator proposed not to increase it to 1:100, as requested by dealers, but, on the contrary, to reduce it by half. This is an unambiguous negative for both the dealer and his client.
Third, the regulator intended to to close access of foreign dealers to the Russian Forex market. In other words, the Bank of Russia obliged all foreign players to comply with Russian legislation if their Internet address is registered in Russia. Thus, a dealer from another country will have to obtain a license from the Central Bank, join an SRO, and play by the rules of the regulator: limitation of leverage, accounting policy in accordance with the requirements, contributions to the compensation fund, etc. Similar measures were once taken in the USA: foreign companies do not serve citizens of this country, and most dealers simply left this market.
Why should the Bank of Russia crush the Forex market?
It is very simple. The Central Bank's attitude towards the OTC market in Russia is generally negative, and even more so towards Forex. Everything that the Central Bank cannot regulate scares it.
The other day the first deputy chairman of the Bank of Russia Sergey Shvetsov once again confirmed this position. The regulator would not like the Forex market services to be widely spread among the country's population, so this segment is deprived of the regulator's support and at the same time attracts its close attention.
In the opinion of the Bank of Russia, the Forex market is a casino where investment of funds in the absence of financial discipline on the part of the depositor leads to loss of money. In addition to this, one can look at the statistics on the volume of fraud in financial services, including the formation of pyramid schemes in Russia. The Forex market also attracts fraudsters who profit from depositors' funds. The lack of proper regulation of the market is one of the reasons for such rampant fraudulent schemes.
Such actions of the Bank of Russia raise concerns about the future prospects of the Forex market. The changes proposed by the regulator have not been approved yet, but it is not excluded that there will be no attempts to promote them in the future. Even if -dealers will be able to adjust to the strict rules of the Central Bank, what should ordinary traders do?
I am blown away by the opinion of the Bank of Russia! I think that in the opinion of a large part of the country, the Bank of Russia itself is the same institution.
That's right, the Bank of Russia is a thief itself!
Dealers will leave Russia, they will go where the laws are more liberal. Just as they did then from the USA to the UK. To comply with this law, in terms of paying taxes and funds, you need good will and a very great desire. And why pay if you can change your internet address and not pay?