Central Bank revokes licences of major forex dealers
Moscow. 27 December. INTERFAX.RU - The Central Bank of Russia revoked licenses of professional securities market participant for forex dealer activities from five companies: Forex Club LLC, Fix Trade LLC, Trustforex LLC, Teletrade Group LLC and Alpari forex LLC, according to information on the regulator's website.
The licences will be terminated from 27 January 2019.
The grounds for the revocation of the licences of all five companies were repeated violations of the requirements of Russian legislation within one year.
According to the Central Bank, Forex Club failed to comply with the instructions of the Bank of Russia, violated internal accounting requirements, submitted inaccurate reporting to the Central Bank, and violated the requirements for the ratio of collateral provided by individuals to the company.
The grounds for cancellation of the licence of OOO Fix Trade were violation of the procedure and terms for information disclosure on the website, failure (improper performance) of instructions and requirements of the Central Bank, violation of licence requirements, improper organisation of the risk management system.
TrustForex lost its licence due to non-compliance with instructions issued by the Bank of Russia, submission of inaccurate reports to the CBR, violation of reporting deadlines, violation of reporting procedures, disclosure of inaccurate information on the website, violations in terms of internal control system organisation and inadequate organisation of the risk management system.
The grounds for cancellation of the license of Teletrade Group were violation of the procedure for calculating the amount of equity, submission of unreliable reports to the Central Bank, violation of the reporting procedure, disclosure of unreliable information on the website, violations of the terms of reporting to the Bank of Russia, failure to comply with the prescription of the regulator.
The licence of forex dealer Alpari Forex was revoked due to non-compliance (improper compliance) with the Central Bank order, violation of the internal accounting procedure, violation of requirements for the ratio of collateral provided by individuals, submission of unreliable reporting, violations in terms of risk management system organisation.
All five companies are obliged to stop carrying out professional activities on the securities market and ensure the return of assets to clients by 27 January; an exception was made only for actions related to the termination of obligations to clients.
The Central Bank also revoked the qualification certificates of the controllers and general directors of these five companies.
Following the cancellation of the licences of these five companies, four companies remain on the CBR's register of forex dealers: Alfa forex, VTB forex, PSB forex and Finam forex.
- www.cbr.ru
"Alpari Forex";
"Alfa Forex";
"VTB Forex";
"PSB Forex";
"Teletrade Group;
"Forex Club";
"Fix Trade";
"FINAM Forex";
"Fix Trade.
After the licenses of five of them are revoked, there will be four companies left in the forex dealer market.
What was the upside of this licence, anyway!
That was to be expected. Foreign exchange trading should be done through MICEX. It should be accessed either directly or through real brokers, not through DCs who called themselves brokers.
Why would that be? That is precisely the purpose of the BC, that small traders can take part in trading without going to the interbank, and without contacting the MICEX. The brokerage company brings them together internally and puts only aggregated offer (if there is any) to the interbank. That is also the BC's task ! For this it takes its own spread !
It's just that the Central Bank has decided that "it's sneaking past its nose for the jackpot". And decided to rip it off. Hopefully, Nabibulina's thirst for profits is greater than anger at the violations found, and after negotiations and mutual settlements everything will go back to normal. True, for ordinary traders it may lead to an increase in the spread.
This was to be expected. Foreign exchange trading should be done through the MICEX. It should be accessed either directly or through real brokers, not through DCs who called themselves brokers.
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The Central Bank has decided to revoke the licenses of major forex dealers, including Forex Club LLC, Fix Trade LLC, Trustforex LLC, Alpari Forex LLC and Teletrade Group LLC. The relevant message is posted on the website of the Central Bank. The grounds for revocation of the licenses were "repeated violations of the requirements of the legislation of the Russian Federation within one year". We are talking about violations of the legislation on securities.
"The validity of the licence is terminated from 27.01.2019. The company is obliged to stop carrying out professional activities on the securities market, except for actions related to the termination of obligations to clients arising in the course of professional activities on the securities market, and ensure the return of property to clients by 27.01.2019", - the Central Bank reported.
In particular, in the work of Forex Club, the Central Bank revealed violations of internal accounting requirements, requirements to the ratio of collateral provided by individuals, as well as submission of inaccurate reporting to the Bank of Russia and failure to comply with the Central Bank's requirements.
The reasons for the cancellation of Fix Trade's licence were: "violation of the procedure and timeframe for disclosure of information on the website, failure to comply with instructions and requirements of the Bank of Russia, violation of licensing requirements, improper organisation of the risk management system".
Experts found violations of internal accounting procedures, collateral ratio requirements and violations in the organization of the risk management system in Alpari Forex.
The Teletrade Group was found to have violated the procedure for calculating the amount of equity, the submission of inaccurate reporting to the Bank of Russia, the procedure for its preparation and deadlines for submission to the Central Bank, as well as the disclosure of inaccurate information on the website.
According to the CBR, TrustForex also had problems with its reporting. The CBR also found breaches in the organisation of the internal control system and inadequate organisation of the risk management system.
As of 1 January 2016, the activities of forex companies in Russian jurisdiction were suspended. In fact, the industry only gained the legal right to operate in May 2017, after licensed market participants had fulfilled all the necessary requirements of the regulator (joined SROs, registered basic operating standards, etc.). At that time, there were eight companies in the Central Bank register - Alpari Forex, VTB Forex, PSB Forex, Teletrade Group, TrustForex, Fix Trade, Finam Forex and Forex Club.