Russian brokers are advertising illegally and it needs to stop. Tatyana Nikitina, an antitrust regulator, advised that showing foreign exchange trading services how to properly advertise their services would be more helpful than increasing fines. However, not all of them are advertising illegally. Nikitina argued that setting up the best practices educational system would do more for foreign exchange traders rather than slapping them with harsher fines.
This way the brokers would know what limits they had when it comes to advertising. If those limits were breached then they would be punished by the antitrust authorities. If the advertising stretched beyond the means of the best practices then fines could be placed.
Fines or Not, Russia Strikes Back
Some think that Nikitina’s pleas are for nothing, and they would rather leave the system alone. The #Russian government will be slapping those fines on foreign trade brokers anyway, so Nikitina may not get his way. The Russian government made the killing blow to foreign currency exchange when they revoked the licenses last year from retail services providing the services to clients.
All that is left is banks to do foreign currency exchange. This will effectively wipe the country of its ability to trade in foreign currency. Banks are the only resource for the trading of currency. With the sanctions put on Russia by the West it is unlikely that this will last. Currently, Russia is opening up the doors for foreign currency again after getting harsh #sanctions lifted by the White House.
Russia knows what it is doing. It is importing and exporting again so that it can keep up with the West. The fines levied against the foreign exchange traders may go up but that is because Russia wants to trade only through imports, exports, and banks.
Cooking the Books
TrustForex, Fix Trade, and Forex Club have had their licenses revoked because they were illegally withholding documents from the government.
This comes because the companies were mismanaging funds and records. It looks like many foreign currency traders need to be investigated more thoroughly. The ability to “cook the books” should get them more than just a terminated membership.
In fact, this is where the deeper investigation should be done on all foreign currency traders. Then, maybe, Nikitina’s wish might come true after all. If the foreign currency traders would stop advertising illegally and act illegally perhaps these three companies would still be up and running today. Unfortunately, that was not the case.
Licensed FX dealers have to be a member of an SRO in order to practice. Unlicensed dealers are not allowed. This was a big deal in the world of FX. Russian government officials were even called in to investigate the matter. It is not just another mistake on the books this time. The companies had until the end of January 2019 to return all the funds to clients. This shutdown created havoc in the financial world in 2019.
Nikitina has valid points in his argument. If the Russian government wants to accept it is still unknown.