The influence of regulation on the Russia FX market
The following guest post is courtesy of Sergey Kornev, Account Manager at MT4 technologies provider and Russian FX market expert Takeprofit Technology. Takeprofit’s products include MT4 plugins, the Klondike liquidity bridge, and the Ashira automated dealer anti-cheating defense. Takeprofit’s clients have included Forex brokerages and white-label solution providers such as FXNet, iTradeSolution, FXFair, TenkoFX, and Darwinex.
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The purpose of regulation is not to squeeze players and products out of a market. The purpose of regulation is to provide security for both the service providers and their clients.
But what will happen with the Forex industry in a country where the regulator is turned against it, and due to this, applies numerous prohibitions and restrictions – referring to the good intentions to protect traders’ rights? Takeprofit Technology’s team located in Russia conducted a brief research study on what is going on with Forex regulation in Russia. The situation in Russia, where recently a new law was adopted by the government, is that since the beginning of 2016 Forex brokers aren’t officially allowed to work without a Central Bank license. What’s actually happening is a very clear example of the negative influence of the regulator.
According to the new law, the Central Bank of Russia becomes the only regulator in this specific field. The Central Bank of Russia is essentially a megaregulator, among whose duties now is to supervise and maintain the activity of all the Forex brokerages within the country.
So why does the Central Bank resort to drastic preventive actions in order to improve the regulation of the Forex industry?