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I haven’t really been keeping tabs on Mother Russia ever since the ruble emerged from the rubble (Haha, so punny. So original.) but I’ve been hearing about this “forex law” that the government has been secretly working on back in December 2014. After exchanging some intel with my counterparts in Russia, I’ve got the latest scoop to share with y’all:

Does Russia really need a new law for its forex industry?

Prior to the bill proposed by the State Duma of the Russian Empire (known aliases: Gosudarstvennaya Duma, Госду́ма, or modern Russian parliament), the country barely had any regulations governing forex brokers running local operations. This became a pressing matter late last year, as the Russian ruble had been subject to low liquidity and speculative trading, combining forces for volatile price swings that threw the Russian central bank in a state of panic.

What does this “Forex Law” cover?

The final text of the law covers forex brokers who are to be officially regulated as forex dealers in Russia. They will be allowed to offer only OTC foreign exchange services and are prohibited from combining these with other activities in the financial market, such as CFD trading.

In addition, a forex dealer must have a net capital of at least 100 million RUB (approximately $1.6 million), with larger minimum capital requirements for those holding more than 150 billion RUB in client funds. The law also states that the maximum leverage must be set at 50:1, although the Bank of Russia could decide to increase the ceiling based on the type of instruments being traded.

Of course these forex dealers must have brick-and-mortar offices located in Russia to house their trading systems and other services. How else can the government keep them under close surveillance?!

But what about foreign brokers?

Foreign brokers could still be welcome to set up shop in Russia, as long as they meet a few requirements set forth by the normative act proposed by the country’s central bank: Their company should have a history of at least five years of regulated business activity in the financial industry and they should not be regulated or registered in an offshore location. Aside from that, the number of foreign employees in their representative office in Russia should not exceed two individuals and the staff should be open to undergoing security checks by government officials at least once a year.

The company will be required to submit a truckload of documentation, which include the broker licenses, recommendations from partner banks, audited financial statements, etc. Foreign forex brokers must also be able to ensure that their management staff hasn’t committed any crimes and aren’t set to be prosecuted for any criminal activity.

Sounds like a plan. When will the Forex Law be implemented?

Russian President Vladimir Putin has already signed the Forex Law, which is now set for official publication. A few clauses have actually been put in force at the start of this year but the publication and implementation are scheduled for October 1, 2015.

With that, forex brokers who are hoping to continue their operations in Russia have until January 1, 2016 to obtain the necessary licenses as regulated forex dealers. The Bank of Russia’s normative act concerning foreign forex brokers looking to run operations in the country is still open for comments until May 28, 2015.