Russian Central Bank Cancels Licenses Of 5 Forex Brokers

Russian Central Bank

The Central Bank of the Russian Federation, unveiled it has withdrawn the licenses of 5 Russian forex trading companies.

The affected companies – Alpari Forex, Fix Trade, Trustforex, Teletrade Group and Forex Club have a deadline until January 27th to cease operations and pay off their customers.

Reasons for license revocation

According to the regulators, the main reason for the license withdrawal were ongoing violations  throughout the year, such as improper execution of the prescriptions of the Central Bank, violation of reporting procedures, disclosure of inaccurate information on the company website, violation of the procedure for maintaining internal accounting and others.

“There are not so many direct customers of the companies under our supervision – 2,000 clients in total. Out of them, no more than 470 are active, those who [have] made at least one deal within a month,” said Larisa Selyutina, CBR’s Head of Securities Market and Commodity Market Department.

Liabilities of these five forex brokers amount to 35 million rubles, and will  be returned to clients by January 27, 2019.

Putin spokesperson backs up CBA’s actions

Dmitry Peskov, the spokesperson of President Vladimir Putin, stated that the move to suspend the license of five forex brokers was within the competency of the Russian financial mega-regulator.

The Association of Forex Dealers (AFD) published a statement that it is suspending the membership of the five brokers, which further worsens the position of the brokers in question.

Alpari Forex does not want to surrender without a fight, so the company will appeal the decision of the CBR. Alpari shared that the Russian central banj has been acting in contradiction with the local rules and regulations. The company stated that it has 1,000 clients in Russia and that their funds are protected in accordance with Russian legislation.

After the bank’s move, only four companies remained on the market – Alfa-forex, PSB-forex, Finam-forex, and VTB-forex.