Russia Forex bill second reading that has been suspended several times before, now has just passed in Duma (Russian parliament lower house). The second reading confirmed rumour that Russia sought to cap leverage in forex trading and revealed several highly significant ruling.

Russia Forex bill second reading that has been suspended several times before, now has just passed in Duma (Russian parliament lower house). The second reading confirmed rumour that Russia sought to cap leverage in forex trading and revealed several highly significant ruling. If you are a trader with Russian broker, then you might want to note this development.

Russia Forex Bill Second Reading

The new law will be the first government regulation on the previously unregulated forex trading in Russia. It contains several rulings that may affect brokers and traders alike. Below is several vital points extracted by forexmagnates and leaprate.

  • Forex brokers will be defined as forex dealers, by whom forex dealing services may only be given by companies that are not banks or ordinary securities broker.
  • Minimum capital requirement for forex dealers is 100million RUB (1.8million USD).
  • Forex dealers have to be licensed by the government as well as be a member of self-regulatory body.
  • Foreign entities can offer services in Russia by obtaining the necessary licenses.
  • Maximum leverage for forex trading is 1:50, but may be extended to 1:100 in some instruments.
  • CFD Trading excluded.

The details of the law seemed to express Russia's commitment to boost credibility on the forex industry in the region, especially amid a wave of scams originated from the area recently. However, the ruling on maximum leverage and the exclusion of CFD trading are quite surprising. Although USA and Japan regulators are limiting leverage at 1:50 max, Russian forex brokers are known particularly for offering high leverages of up to 1:1000. If the bill is applied as it is, then they will have to change a major part of their terms and conditions for clients, directly affect the way traders trade. While Contract for Difference (CFD) is an important asset for brokers dealing in leveraged trading. A derivative of stock, commodities, and indices, CFD trading commonly offered along with forex. Therefore, it is quite surprising that CFD trading is not included in the bill as well.

Undoubtedly, as it is, Russia forex bill shall inflict changes when it comes into effect. However, it is still going to have to pass a third reading. And afterward, the bill have to be signed by Russia President, Vladimir Putin, for it to formally become a new law and establish clear legal boundary for Russian forex brokers. No other changes is expected to come at later date, although another review is possible.