Finance Magnates article –
Excerpts from the article – (bold type added for emphasis)
The mega-regulator’s move this morning was to strip several broking companies of their licenses and therefore corner the market into the hands of major local banks.
Alpari, TeleTrade, TrustForex, InstaForex and Forex Club have all been suspended.
The approach of the central Russian authority is uncompromising. In traditional fashion for the country, the forex broking business got served onto a platter to large mega-corporations controlled by individuals close to the Russian government.
With competition lacking on the local marketplace Russian citizens are focusing their attention offshore. A number of brokers have been pursuing opportunities outside of the country.
While the official regulatory framework was taking shape, the market quickly reoriented.
A number of locally operating companies opened offices in offshore jurisdictions.
They’ve given them one single month to return their clients all their money.
It is a part of global trend to reduce the leveraged derivatives trading. Just a few weeks ago UK regulator FCA issued the project of new rules and announced same actions.
It seems that soon all traders would be forced to move to regulated markets like stock and futures exchanges.
Two excerpts from this Finance Magnates article suggest that the issue for the Bank of Russia is capital flight in the form of trading accounts moving offshore. The five suspended brokers are alleged to be heavily involved in aiding and abetting the offshoring of client money.
Here are the two excerpts (emphasis added)–
According to some details provided by the Russian financial mega-regulator today, the rationale is systemic relocation of clients to offshore jurisdictions.
“We are going to take measures to prevent offshore brokers from attracting more clients from Russia,” said another official of the Russian central bank.
Seems to follow this and other nations that are attempting to attack the USD via blockchains and corrupt cryptos.
The Russian regulator, much like ESMA and the FCA, also announced they intend to lower the leverage to 1:30 recently.
They barely have any licensed brokers left though, so I am not sure who will be trading with that leverage to begin with.
I guess no one. Like many EU clients, Russian clients will move to offshore brokers. Governments over the world are slowly but strictly following their plan to eliminate retail traders.
Alpari, which lost its Russian license last month, announced that it will not be able to process payments with VISA cards in US dollars and Euro until March due to “technical issues.”
Note: For whatever it’s worth, Russia is the world’s largest country by land-mass, not by population.
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