The Russian Finance Ministry replies to CRFIN: positively considers forex regulation in Russia

We continue reporting on the regulatory efforts in Russia which seem to pick up lately. Latest report was about Russian Finance Ministry drafting a framework, however this has not been publicly confirmed. Russia's version of NFA is called CRFIN and its Chairman recently received this letter from Russia's MINFIN:

MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION (MINFIN OF RUSSIA)

DEPUTY MINISTER

9, Ilinka Str., Moscow, 109097

teletype: 112008

telefax: 625-08-89

29.08. 2012 № 01-AЛ-01-01/23

Mr. Sergey Vladimirovich Krivoborodov

Chairman of SRO NCP CRFIN

1 korpus 57 (4) Partiyny Per., Moscow 115093

Dear Sergey Vladimirovich,

Having considered your appeal of 03.07.2012 № 5-МФ regarding the implementation of self-regulatory mechanisms in the retail 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 market, the Russian Finance Ministry informs about the following.

The Russian Finance Ministry encourages the initiative for implementation of self-regulatory mechanisms in the Forex market.

Experience has shown that self-Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term is a natural and integral part of setting and standardization of professional activities. In the absence of mechanisms of government regulation in the Forex market, enhancement of the provided services there by introduction of appropriate standards, rules and other means to ensure transparency of trading activities and guarantees of user rights, worked out by SRO NCP CRFIN, is an important stage in the development of this segment of the Russian financial market. At the same time, however, the market participants should have the stimulus to observe the corresponding standards and maintain the business reputation – should these components be violated, the self-regulating organization under consideration is very likely to be used as a tool for redivision of the market by some of its members.

We draw your attention to the fact that increase in the membership of SRO NCP CRFIN should be strictly in line with the principle of voluntariness. At the same time, we consider that measures of SRO NCP CRFIN to involve other market participants in its activity helps to form consolidated views on the issues of market development and supports competition.

Sincerely,

A.L. Savatyugin