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Forex dealers have to disclose risk data on their services from January 10

On December 27, the Russian Central Bank revoked licenses of five largest Russian forex dealers, starting from January 27

MOSCOW, January 10. /TASS/. Forex dealers will be required to disclose full information about their activities and the risks associated with obtaining their services, according to a press release from the Russian Central Bank.

The requirements for companies are contained in the basic standard for the protection of the rights and interests of recipients of financial services in relation to forex dealers, developed by the Association of Forex Dealers and approved by the Central Bank.

Forex dealers will be obliged to provide the recipient of financial services with current information about its full and abbreviated name, membership in a self-regulating organization, existing representatives (agents), commission fees and the procedure for paying compensation in case of bankruptcy, the release said.

The document payed special attention to informing consumers about the risks associated with framework and individual agreements, including possible financial losses, as well as expenses for fulfilling obligations. According to the standard, such information must be provided to the consumer prior to the conclusion of a framework contract and reflected in the risk notice, which must be signed by the consumer.

On December 27, the Russian Central Bank revoked licenses of five largest Russian forex dealers - Forex Club, Fix Trade, Trustforex, Alpari Forex and Teletrade Group. Licenses are revoked starting from January 27, 2019.

At the same time, the Central Bank canceled qualification certificates of supervisors and general directors of these companies.

Thus, the Central Bank revoked licenses of five out of the nine Russian forex dealers. Alfa-forex, VTB-forex, PSB-forex and Finam-forex remained on the market.

Russian Presidential spokesman Dmitry Peskov told reporters later that the Russian Central Bank in the situation with revoking licenses of five Russian forex dealers acted within its competence. He did not comment on the situation with the revocation of licenses, noting that it was rather a question for the economic bloc of the government. "As a mega-regulator, the Central Bank uses its powers, its prerogative, to make such decisions," Peskov said.

Head of the Securities Market and Commodity Market Department Larisa Selyutina said that activities of the five forex dealers, whose licenses were revoked by the Russian Central Bank, were focused on aggressive advertising and withdrawing Russian clients to foreign jurisdictions. "All companies whose licenses have been revoked are ‘subsidiaries’ of large foreign forex dealers with recognizable brands, operating mainly in foreign forex markets. The decision to revoke is connected with the regulator’s deep concern for enormous risks for Russian citizens from the companies’ activities," she said.