Russia forex bill has passed its third reading. Now what's left for the bill to come into effect is a review by Federation Council and Russian President Vladimir Putin signature. Meanwhile, although regulatory front in Russian forex industry has advanced, Russia's own currency has retreated.

Forex industry newscaster leaprate yesterday (16/12) reported that Russia forex bill has passed its third reading. Now what's left for the bill to come into effect is a review by Federation Council and Russian President Vladimir Putin signature.

Russia Forex Bill Passed

Russia Forex Bill

The final draft of the Russia forex bill shed light to the future of forex trading in the country. In case you missed our last report on the bill, here is some important details to note plus some updates:

  • 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.
  • Forex brokers' trading systems have to be located in Russia.
  • Minimum capital requirement for forex dealers is 100million RUB (1.8million USD). The figure might be bigger for companies that supervise client funds of more than 150million RUB.
  • Forex dealers have to be licensed by the government as well as be a member of self-regulatory body by January 1, 2016. The self-regulatory body will set standards for adverts and other trading conditions. The self-regulatory body in this case refers to CRFIN.
  • Forex brokers have to join a compensation fund where the money from the funds will be used to compensate  clients in case of bankruptcy.
  • Disagreements between forex brokers and their clients could be brought to arbitration court.
  • Foreign entities can offer services in Russia by obtaining the necessary licenses and fulfill the required conditions.
  • Maximum leverage for forex trading is 1:50, but may be extended to 1:100 in some instruments by the Bank of Russia.
  • CFD Trading excluded from the bill. It means, forex brokers will only act as forex dealers and prohibited from soliciting trading on any other instruments in the market, including CFD.

 

Russian Ruble In Forex Market

Meanwhile, although regulatory front in Russian forex industry has advanced, Russia's own currency has retreated. Even after Central Bank of Russia abruptly hike rates by 6.5% to 17% on Monday morning, ruble continue to go on with its rapid decline. Forexmagnates reported that banks removed pricing and liquidity due to ruble volatility. Consequently, some forex brokers have started to suspend trading on the currency, and some others have lowered leverage available for Ruble crosses. Dukascopy have halted trading on USD/RUB, and Alpari RU have gone back and forth between halting trading and changing margin requirements for USD/RUB and EUR/RUB pair. eToro have stopped all trades on USD/RUB also, and today will be followed by FXCM and RoboForex. 

RubleRuble performance against US Dollar, compared to major currencies Euro, Poundsterling, and Yen

Triggered by combination of Ukraine-related sanctions and oil price collapse, ruble have slid significantly against US Dollar and turned into the worst performing currency in the world. In 2014 alone, the currency has depreciated to more than 50% against US Dollar. The situation might worsen for Russia and its businesses as it is expected to enter recession next year, although the impact on the international financial system will be limited as Ukraine-related sanctions has already cut Russia off from a large part of worldwide economy. The current circumstances have put forward speculation that capital control might be applied. If that happens, more forex brokers are expected stop trades on Ruble as well.