Over the years, Russia has garnered a negative image in the online Forex trading community due to the multitude of broker scams and unscrupulous financial activities performed by market participants. Russia is also responsible for some of the most advanced and leading Forex trading technologies in the market, which makes it a highly conducive country for innovation and development of new platforms.
Therefore, Russia receives a mixed response in the market owing to the inconsistencies in the market for traders and investors. Both local, as well as international traders in the global trading community, look for ways to find trusted and reliable Forex brokers in Russia so as to protect their trading capital against broker inconsistencies.
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The Change From CRFIN To NAFD
All Forex brokers in Russia has to be regulated by the Central Bank of Russia to be able to become a Government recognized company that can offer Forex trading products and services to Russian investors. The Bank of Russia has insanely high regulatory requirements, which forced several Forex brokers in Russia to operate in the country without a valid regulatory status. However, an increasing number of financial scams and the affinity of traders into trading with regulated brokers forced several independent members of the financial markets of Russia to come together to form the CRFIN.
The Center For Regulation in OTC Financial Instruments and TAechnologies (CRFIN) was one of the most effective regulatory agencies in Russia that were developed to regulate and supervise financial companies, especially brokers that deal in CFD and OTC products. The CRFIN was a self-regulatory organization that took care of all aspects of regulating financial brokers and was considered as a highly reputed agency that worked in the best interests of the markets. Although CRFIN generated excellent reputation and popularity among both brokers as well as investors, the CRFIN was still not perceived as a Government-approved agency, despite the request from top officials and financial experts to include the CRFIN as one of the approved agencies under the Bank of Russia regulatory framework. Repeated attempts to be accepted by the Bank of Russia were futile, which forced the CRFIN to rebrand itself into a more modern agency by incorporating various aspects of the Bank of Russia regulations.
Changes in the administration and regulatory oversight over the existing rules of the CRFIN paved the way for the formation of the National Association For Forex Dealers (NAFD), which came into existence in January 2016. NAFD became one of the core participants in the field of Forex market regulation by being an authentic and highly reputed regulator for all FX participants in Russia. NAFD Forex brokers should be a member of the NAFD and should obtain a central bank license to be able to operate in Russia. All NAFD regulated brokers come directly under the supervision of both NAFD and the Bank of Russia for ensuring a safe, transparent, and robust operation of the Russian financial markets. The NAFD is oriented towards regulating and licensing Forex brokers, which provides better control to oversee the activities of Forex brokers without diverting their attention towards any other regulated entities or industries.
How Does NAFD Regulated Brokers Protect Its Investors?
NAFD has an entirely new regulatory framework that was designed and developed by industry experts to incorporate several aspects of modern regulatory standards that are usually adopted by the leading regulatory agencies. The NAFD was modified extensively from its earlier CRFIN regulatory guidelines, and the change in administration, as well as regulatory guidelines, have enabled the NAFD to attune itself to the demands of regulatory guidelines required by modern Forex traders. NAFD Forex brokers have an obligation to follow several legislative guidelines issued by the Bank of Russia and the Finance Ministry.
Apart from the official guidelines from the Government, NAFD also stipulates several rules and policies that enable NAFD regulated brokers to enjoy better privilege in the highly competitive marketplace. Although NAFD regulated Forex brokers that operate out of Russia, there are restrictions on traders on their choice of a Forex broker. International and overseas brokers are welcome to offer their services to Russian traders; however, brokers that expect to set up their brokerage in Russia will be required to undergo the difficult regulatory procedure to be granted a valid central bank license as well as NAFD regulatory status. The Russian Government also became proactive in its efforts to cut down on the financial scams that have rendered a bad image to the Russian financial system.
The authorities had clamped down on several illegal and non-licensed entities by providing a deadline to become regulated by the NAFD or wind up their brokerage services entirely. Investor protection seems to be at the top of the Russian Government’s priority, which is indeed excellent news for the traders in the country that are looking for a safe and secure trading environment.
The Growing Popularity Of NAFD Forex Brokers
Ever since the NAFD started regulating the Forex brokers in the region, the regulatory authority has begun receiving recognition and praise from all quarters of the trading community. NAFD regulated brokers, such as IronFX and FBS, are slowly starting to gain prominence in the global financial markets, as several mainstream brokers have started to set up their brokerage in Russia by being regulated directly by the NAFD and the Bank of Russia. Some of the market leaders in the Forex trading markets have their humble origins from Russia, and after the rebranding of the CRFIN to the NAFD, these brokers have started to enjoy more popularity in their local markets.
NAFD regulated brokers might not be as reliable as some of the other regulated brokers such as the ones regulated by the NFA or the FCA. Nevertheless, NAFD does provide that extra bit of reassurance for people who have experienced adverse trading conditions at the hands of dishonest Forex brokers. Regardless of the changes in regulatory structures and the active involvement of NAFD into broker regulation, traders might also feel that NAFD can do a lot more to improve the security aspects without compromising on the overall user experience. NAFD is still in its early days, and perhaps the agency might evolve into a world-class organization in the future.
NAFD Regulated Forex Brokers For Retail Traders
Retail traders may find Forex brokers in Russia to offer better trading conditions due to the relatively lower restrictions on trading. NAFD does not impose any leverage restrictions or any rules that might hinder a trader from exercising their freedom on trading. NAFD Forex brokers also offer trading accounts with relatively lower trading capital, which help retail traders to access the markets without risking a larger capital.
Even though the NAFD has instructed all brokers to become regulated entities to provide Forex services in Russia, there may be several brokers that may be offering its services under the radar. Therefore, all traders must ensure the authenticity of the brokers before choosing them.
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