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Russia is one of the largest countries in the world, and one of the most controversial geopolitical and economic players in the international arena. Even the basic characteristics of this country can be described as a paradox upon paradox. Russian Federation’s territory is almost twice the size of Europe, yet with the overall population of 146 million, it is clear that a large chunk of this enormous territory is not particularly populated. The Russian economy is, without a doubt, one of the biggest in the world, and the country’s rich natural resources contribute to its significance as the world’s impactful economic player. This notion is well reflected in the Russian GDP of just over 1.658 trillion USD, yet the GDP per capita in this country only reaches 11.289 USD. Nevertheless, it is impossible to overlook this large market and the variety of opportunities that it offers to the entrepreneurs of professionals from different financial sectors.
When it comes to the Russian Forex market, it is easy to see that, like the national economy, it has gone the long way to becoming what it is today – an interesting and promising environment for both the traders and Forex trading brokers in Russia alike. In this guide, we will explore the Russian FX market a bit further, provide you with a list of the best Russian Forex brokers, and assess the state of the country’s regulatory environment.
Our list of regulated Forex brokers in Russia
It is never an easy task for a trader to choose the broker that best suits their needs. Everyone is looking for a reliable, qualified broker, that is highly committed to the security of its traders, all while offering a number of tools and conditions that will ultimately translate into lucrative profits. However, how does one go about finding the one like that? Well, this entire process will, almost certainly, require some extensive research and investment of a lot of time and effort. On top of that, the searching and the decision-making is bound to be quite stressful, as making a mistake and joining a broker that is not right for you can lead to financial losses or even a lifetime of debt.
For the purpose of making this task a little easier for you, we have created a list of the top Forex brokers in Russia, where you will be able to assess their success rates, regulatory measures, and the trading tools that are available to their traders. While we are confident that the brokers that we present in this list are both qualified and reputable, we have to note that the list itself is not exclusive, and cannot be used as a substitute for the duly research that each trader has to conduct before making the final decision.
Safety measures with Russian Forex brokers
The Russian economy has often been subjected to major shocks – the collapse of the USSR, long and hard period of transition from communism to capitalism, the global financial crisis of 2008, and, finally, the gradual becoming as one of the main economic actors in the international arena. It is, therefore, not a surprise that some of the financial markets did not reach Russia, and did not develop at such a rapid speed that we often witness in other countries across the world.
The forex trading market is no exception. Although it is slowly growing in popularity, there is still a long way to go until it reaches the size and significance of the markets based in the neighboring European countries. Moreover, it was not until recently that the local authorities realized that the FX market in Russia is in scarce need of tougher regulations and consumer protection policies, as the amount of scams has skyrocketed to the number that could no longer be ignored.
Having said that, we would like to note that by no means are we suggesting that the Russian authorities are failing to do their job properly. On the contrary, their ability to react to market developments in a timely and efficient manner has led to the market’s subsequent growth in a much safer and healthier environment. We will now discuss what the country’s main regulatory bodies are and which measures do they implement to oversee the smooth functioning of the Forex trading brokers in Russia.
The Central Bank of Russia and the Financial Market Relations Regulation Center
There are two main regulatory bodies in Russia that are responsible for overseeing the smooth and secure functioning of the local FX market. The Central Bank of Russia (CBR) has assumed its role as one of the main trading regulators in 2013, after its predecessor, the Federal Financial Markets Services (FFMS) was abolished. When it comes to regulating Forex trading Russia, the CBR’s functions include ensuring transparency and consumer protection, as well as facilitating the segment’s growth and expansion. On top of that, the CBR is single-handily responsible for the Russian coinage and the issuing of the Russian ruble.
Similarly, the Financial Market Relations Regulation Center (FMRRC) monitors and regulates the services that the Forex trading brokers in Russia provide. Although the responsibilities and key values of the two bodies overlap a lot, the FMRRC is mostly focused on the quality of the broker’s operations, traders’ protection, and mitigation of the conflict of interests. It is a bit unusual for the country to have two regulatory bodies, and what it often means is much tougher measures and conditions in place. Below, we will examine Russia’s Forex trading regulatory environment and see whether it is truly unreasonably tough, or whether it actually does everything necessary to make the market more secure and accountable.
How do brokers obtain these licenses?
To put it shortly, the process of obtaining a license with the Russian regulatory bodies is very hard. On top of having to meet all the requirements issued by the CBR and FMRRC, Forex trading brokers in Russia have to join the Association of Forex Dealers (AFD) and deposit a 2 million RUB membership fee. The latter is essentially performing the functions, similar to that of the FMMRC, but in a more case to case, nuanced manner.
With such a complicated process of obtaining the license in place, it is not surprising that most of the brokers that offer their services in Russia are actually licensed and physically-based elsewhere, and only a little over 1% of the overall number of brokers in Russia are locally licensed. So what are the potential risks of joining a foreign broker? To put it shortly, it really depends on the broker that you end up choosing. What we suggest that you look out for is the actual regulatory body that the license was obtained from. If it is a reputable, well-established entity, such as the popular Cyprus-based CySEC or the UK’s prestigious FCA, then there are little to none risks and security concerns over choosing the services that its licensee provides.
Regulatory requirements in the Russian Forex market
Margin and leverage
When it comes to the leverages, the industry experts and the policymakers are yet to agree on how to go about them. The problem is that leverages are both potentially very profitable, and also a very risky tool of trading. In the hands of an experienced trader, they can translate into the lucrative profits while the initial deposit being relatively low. On the other hand, an amateur trader can get excited by the opportunity to earn more while investing less, and, due to the lack of knowledge and skill, end up losing more than they originally invested. While leverage being the single most popular source of all the major losses made during the trading sessions, the regulatory bodies’ standing on it is unclear. Many argue against the limitation of leverages claiming that as an adult, each individual trader has a right to make their own decision on whether or not they want to undertake such a financial risk. In other states, there is a clear need for the protection of the inexperienced traders from what can potentially become a devastating debt.
The CBR and the FMRRC are both clearly in favor of some regulations in place, as the maximum leverage that the Forex trading brokers in Russia can provide is 50:1. Although this might seem quite small, one should remember that many regulatory bodies, especially those based in Europe, reduce the leverage even further, down to 30:1. Moreover, regardless of your opinion on the leverages, you should always keep in mind that the caps on leverages are always introduced to serve the best interests of the traders.
Public awareness and risk disclaimers
In another attempt to protect customers from the unnecessary risks, Russian regulatory bodies commit to spreading the information and awareness of what Forex trading can encompass – both in the best and in the worst-case scenarios. With the latter especially, Russian regulatory entities make sure that the Forex trading brokers in Russia provide their traders with the full risk disclaimer on the tools and services that can potentially translate into devastating losses. This notion is just another demonstration of the extra mile that the CBR and the FMRRC are both prepared to go to ensure the mitigation of the potential risk factors in Forex trading.
Minimum operating capital and segregation of funds
This particular requirement is quite common among the variety of brokers across the world. Ensuring that the broker possesses a certain amount of money is but an additional layer of security for the traders that are associated with it. The Forex trading market is extremely volatile, and the regulatory body demands the brokers to confirm that they can both withstand any market fluctuations, and, are not operating on the verge of bankruptcy, and thus, are not putting the funds of its traders at risk.
When it comes to obtaining a license in Russia, the requirement for the minimum operating capital is 100 million RUB or an equivalent of 1.5 million USD. Prior to and upon being granted the official license, the broker will be asked to maintain this amount at all times, and provide the proof of it upon the request.
Moreover, like many other regulatory bodies, the FMRRC demands Forex trading brokers in Russia to keep their funds separate from those of their respective traders. The reason behind this regulation is the desire to make sure that in the case of the broker going bankrupt, its customer does not end up with their funds being frozen or lost for good. Moreover, by enforcing segregation of funds, Russian regulatory bodies prevent brokers from misusing the traders’ funds, whether accidentally or otherwise.
Investor compensation fund
As previously stated, the FX market is extremely unpredictable and subject to volatility, thus, sometimes the unfortunate turn of events is unavoidable. In order to extend the customer protection and mitigate potential losses, market regulators from all over the world, and Russia in specific, demand its brokers provide compensation to the traders in the event of the broker going bankrupt. While this is, without a doubt, a great way to reinforce customer protection, it has to be noted that such compensation is not available for everyone, and there is a cap on the maximum amount that the Forex trading broker in Russia can repay its traders.
European Forex market that allows bonuses
Like many other actors involved in the financial sector, Forex trading brokers are always looking for ways to expand their customers, and, by definition, increase their profits.
In doing that, brokers from all around the world are often using bonuses and promotions as a way of attracting more traders. There are two main kinds of bonuses that the broker can offer. Welcome bonuses are gifted to the new traders as a way of kickstarting their trading sessions. In turn, refill bonuses are used for returning clients and are usually announced and issued periodically.
We are well aware that the provision of such bonuses is usually the single most important factor in making a decision on whether or not you would like to join a certain broker. We are, therefore, happy to report that unlike the other countries in Europe, Russia fully permits the provision of bonuses, and the local traders can fully benefit from them.
Is it easy to start trading with top Russian brokers?
Any individual aged 18 or older is eligible to start trading Forex in Russia, especially if they manage to meet the requirements put forward by the broker of their choice. Moreover, getting into the Russian FX market won’t cost you a dime. What we mean by that is that it is free for everyone to join the brokerage, however, there will likely be some requirement for the minimum initial deposit. This amount varies – some of the top brokers in Russia will be asking for something around 5 USD, while others might demand a minimum of 500 USD. We suggest that you invest some time into doing proper research of the brokers available in Russia and choose the one that suits you best.
The ultimate guide to best Russian Forex brokers
As we mentioned earlier, the Russian Forex trading market is relatively young and is only now moving towards establishing a strong standing among its international counterparts. Nevertheless, it is not any less secure than other, more mature FX markets. On the contrary, Russian regulatory bodies are so committed to customer protection and the mitigation of potential scams, that it became what is known as one of the strictest regulatory environments in the world. Overall, we can easily say that Forex trading in Russia is both secure for the traders and full of potential for lucrative returns. We can, therefore, easily recommend exploring it.
