Simplified identification set to increase client number of Russian Forex brokers up to 5 times

The forecast was made by Evgeny Masharov, head of Russia’s Association of Forex dealers.

The number of clients of Russian Forex dealers (the official designation of Russian Forex brokers) is set to increase 4-5 times if the proposed legislation for introducing a simplified client identification procedure is approved by Russian lawmakers, according to the head of Russia’s Association of Forex dealers Evgeny Masharov, quoted by information agency TASS.

Mr Masharov added that, according to client surveys, the lack of such a simplified procedure is the main hurdle for picking a Russian Forex dealer over a foreign Forex company.

Let’s recall that the relevant bill was submitted at the Russian State Duma (the lower chamber of the Russian parliament) in May this year. The authors of the bill state that an account at an offshore Forex broker may be opened online, without a visit to the company’s office, whereas the procedure for becoming a client of a Russian Forex company is way more complicated.

The bill envisages changes to Russia’s anti-money laundering law. It proposes a simpler procedure for client identification when signing a contract with a Forex dealer. The new rules will apply to companies that have Forex dealer licenses issued by the Bank of Russia. Let’s note that, at present, there are only eight companies with such licenses.

The authors of the document explain that, as of May 15, 2018, the number of clients of the licensed Forex brokers in Russia is 3,539. At the same time, there are about 200 unlicensed companies that offer Forex services to Russian clients. These companies usually operate offshore. The total number of Russian clients trading through platforms of brokers that do not have licenses issued by the Bank of Russia is around 500,000. The average deposit per client is RUB 50-60,000.

The Central Bank of Russia identified 208 illegal Forex brokers in the first half of 2018. The list of these 208 entities includes foreign Forex brokers that illegally target Russian clients, as well as Russia-based companies which operate without the necessary FX dealer licenses, as required by the Russian law.

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