NAFD Forex Brokers and How the Organisation is Able to Protect Forex Traders in Russia
For those of you looking to invest in Forex trading in Russia, the issue of regulation is still in a state of flux; so much so that many traders are finding themselves totally confused when trying to find the best Forex broker. Russia has so far not had a very good record, and has received a lot of bad press relating to the security of its financial markets and the strong possibility of falling victim to a scam. This is probably one of the main reasons for the regulation of financial services providers being handed over to the Central Bank of Russia, and for new rules and regulations being put in place. However, the new powers of the Central Bank won’t come into force officially until the end of 2016, at which point a Forex broker wanting to offer its services to Russian traders will have to obtain a special licence from the Central Bank. Another requirement will be for the provider to be a member of a self-regulatory agency. There are a number of these agencies seeking authorisation from the Central Bank, and one of them is NAFD.
NAFD – Formerly known as CRFIN
The National Association of Forex Dealers (NAFD) was previously known as CRFIN (Centre for Regulation in OTC Financial Instruments and Technologies). It was rebranded following a meeting of Association members, and included the creation of a new Board of Directors and Chairman of the Board. But why did CRFIN feel the need to make such changes?
First, we should explain how CRFIN came about. It happened when a number of independent members of the Russian financial markets got together and developed a way of regulating and supervising financial companies, and it happened to be very effective at what it was doing. In the industry, it was highly respected and considered to be an effective agency. The problem came about because the Government was unwilling to give its approval, even though countless requests were made, not just by the agency itself but also financial experts. The lack of recognition from the Government forced CRFIN to rethink its strategy, and ultimately led to it being rebranded as NAFD.
Will you be protected if you choose an NAFD Forex broker?
Of course, choosing an NAFD-regulated broker is always going to be a better option than choosing one that is unregulated. NAFD has introduced a new regulatory framework, designed and developed by experts in the industry. The framework also includes a number of features you would expect from leading regulatory bodies, which means that NAFD is able to match the demands and expectations of modern Forex traders. From the end of 2016, Forex brokers will have to comply with guidelines issued by the Central Bank of Russia, and NAFD has also included a number of its own.
We have to inform you that at this present time there are very few Central Bank- and NAFD-regulated brokers, but it is still early days, and there is no reason for the numbers not to increase. The industry and investors will become more aware of the regulations, and more financial entities will be looking to make their services conform to a more recognised standard. Forex brokers based overseas will be required to undergo the formal regulatory procedures if they want to attract Russian investors, or have a base of operations in the country. This will mean a licence from the Central Bank and a self-regulating organisation such as NAFD.
The future is looking much brighter for Forex traders in Russia.
The Government of Russia is being very proactive in an attempt to reverse the bad name the country has been given in relation to financial scams, and illegal, unlicensed and unregulated financial services providers. It has set a deadline for all Forex brokers in Russia to fall in line with the new regulations, or risk being closed down.
NAFD is currently enjoying renewed recognition from the financial markets industry, and the number of NAFD-regulated brokers is steadily increasing alongside the improvements. Some of the better-known international Forex brokers are starting to look at Russia as a safe base of operations, and looking to gain authorisation from the Central Bank and NAFD. There are a number of better-known regulatory bodies such as the FCA and CySEC, but if you’re looking to trade Forex in Russia, the Central Bank and NAFD are looking all set to become reasonable regulators. The introduction of new rules and regulations takes time before they become become common practice, and any brokers will obviously need to be given a reasonable amount of time to fall into line. We always advise new traders to be very cautious with their first investments, and if you’re looking to become a trader in Russia this advice is especially important.
The future for all of you trading in the financial markets in Russia is definitely looking much rosier, with the increased chance of it becoming better supervised and much safer. The number of authorised Russian brokers is going to rise, which will give you a much wider choice. You will be able to find plenty of information regarding any developments, and we will also endeavour to keep you informed.
There are always going to be a small number of unlicensed brokers slipping through the net, however good regulation eventually becomes; and you can bet they’ll be offering some amazing bonuses and offers. Your best option is to stick with a broker that has gone to the trouble of being licensed, and to check any claims they may make. A common ploy of unregulated brokers is to claim that they have a licence, but when you check on the regulator’s website there is nothing to back up such claims. It is easy enough to validate a broker’s licence, and you’d be mad not to do so. If you can’t find the information online it is possible to contact a regulatory body and ask for clarification.