CySEC-Licensed Broker Alfa-Forex Halts Service to Russia Residents ‎

Cyprus-based broker Alfa-Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term is suspending its service to Russia’s ‎‎residents,‎ ‏‏probably due to CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term’s new licensing restrictions.

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The brokerage statement Tuesday cited the regulatory obligations as the ‎reason for discontinuing its offering to Russian clients, which takes effect on ‎March 23, 2018.‎

The announcement reads: "All the obligations to the current Alfa Forex clients will be duly performed in ‎accordance with the present agreements, Terms of Business and applicable law ‎under the control of the CySec." ‎

Last week, the Cyprus Securities and Exchange Commission ‎‎(CySEC) ‎published a new circular that is requiring all Cyprus Investment Firms (CIFs) ‎‎to fully disclose all countries in which they are operating.‎

Firms will need to notify CySEC when they are providing their services in ‎third countries. Before they can deliver their product in a given country they ‎will need to first get appropriate authorisation from the country’s regulatory ‎authorities.‎

If that were the case, indeed, we may anticipate more brokers to announce ‎a similar suspension in coming weeks, not only in Russia but across many other ‎non-European ‎jurisdictions.‎

This will obviously be a mess for Cypriot brokers since ‎their financial ‎statements show that the bulk of revenue ‎isn’t coming from Europe. In other ‎words, brokers cannot ‎survive on European business alone.‎

The above approach, if confirmed, is expected to cause a ‎tremendous stir ‎among Cyprus-based operators and clients ‎alike. Confirmation means that ‎the Cypriot financial ‎regulator would announce a more detailed ruling, or ‎enforcement actions related to the ‎one issued a weak ago, by which brokers ‎operating ‎under the CIF license are obliged to cease soliciting ‎business ‎outside the European Union.‎

The first thing that comes to mind is that CySEC is just ‎proceeding with what ‎it has been doing since it first issued ‎its circular banning trading bonuses ‎and tightening trading ‎conditions, including the allowed leverage. The ‎second ‎explanation is that CySEC is following in the footsteps of ‎several ‎other European regulators.‎

However, in either case, CySEC can’t simply follow in the ‎footsteps of such ‎regulators, whether they be established ‎watchdogs such as those of the UK, ‎Spain, France and ‎Germany, or even minor ones such Malta’s MFSA. FX ‎‎business for these jurisdictions is tiny as a proportion of ‎the rest of their ‎financial industries. Sometimes, they just ‎don’t want the FX business to ‎tarnish their brand as it ‎ultimately damages the reputation of the country ‎itself.‎

This isn’t the case for Cyprus and simply means that it ‎could lose its position ‎as a financial hub bridging Asia ‎and the Middle East to mainland Europe.‎

It would also effectively kill the growth of the Cypriot ‎brokerage sector, ‎including banks which benefit from the ‎brokers clients’ deposits, whilst ‎playing into the hands of ‎jurisdictions that can offer less strict regulations, or ‎at ‎least the advantage of setting up in a more prestigious ‎hub.‎

How these brokers will manage to maintain market share ‎outside Europe ‎depends entirely on their business models. ‎Obviously, they will turn their ‎focus to more ‘universal’ ‎regulations. But this is also more complicated since ‎it ‎implies additional sub-strategies to handle dealing with ‎non-EU clients ‎from countries with regulators, and non-‎EU clients from countries without a ‎regulator.‎