Binary Options Trading in Russia
Russia is a relatively wealthy country and many of its citizens have some funds to spare for trading activities such as binary options trading. The stats do not lie: four top binary options brokers report that 30% of their traffic emanates from Russia. Furthermore, when Cyprus decided to bail out its economy from the bank accounts of those with excess of 1 million Euros in bank accounts across the island in 2014, it was discovered that many of the affected bank account owners were Russian investors.
With such vast amounts of money flowing from Russia into mainly EU-based brokerages, are there any monies flowing in the opposite direction?
For a country with such vast resources, it is very surprising that better regulation of its financial markets has not been achieved. The local stock exchanges such as RTS and MICEX are well regulated, but forex regulation was only achieved a few years ago. Binary option trading is presently an unregulated industry in Russia. This has led to a vast influx of marketing campaigns from foreign binary options brokers, with a vast outflow of funds from Russian traders to these brokers.
The Russian financial market has governmental regulatory agencies as well as industry self-regulating organizations.
On the government side, the Central Bank of Russia regulates the conduct of the financial markets. The two industry self-regulating agencies are:
- Centre for Regulation in OTC Financial Instruments and Technologies (CRFIN), now renamed the National Association of Forex Dealers (NAFD).
- The Commission for the regulation of relations on the financial market (KROUFR), which is a source of information on unregulated entities operating in the Russian financial markets.
Presently, Russia has no local binary companies and this has pushed almost all binary options trading into the hands of brokers in the EU and other areas with opaque regulatory situations. This may likely change in future as deliberations among the relevant stakeholders on regulation of the binary options industry has begun.
Currency Pairs & Spread
The Russian Rouble is prominently featured on several platforms as a pairing with the US Dollar. Therefore, Russian binary options traders can trade the USDRUB asset, as well as other Russian assets such as the RTS and MICEX10 stock indices.
The binary options platforms encountered by Russian traders are a mixture of proprietary platforms and turnkey platforms, with a large preponderance of turnkey platforms from CySEC-regulated brokers being used. This reflects the usage of Cyprus brokers as the main destination of Russian binary options traders.
CySEC has banned the issuance of bonuses by its regulated brokers, but a number of them are still offering these bonuses. Whether this will continue for much longer without drawing the ire of CySEC is in doubt.
Deposit and Withdrawal Options
What deposits and withdrawal are available to binary options traders in Russia? In view of the economic sanctions placed on Russia by Western governments and the EU, Russian binary options traders have to factor in these sanctions as they affect their ability to deposit and withdraw funds from their accounts. Fortunately, there are several Russian payment systems which have attained international acceptability.
- Digital wallets: This is now the preferred form of payments for Russian traders. WebMoney, Yandex.Money and Qiwi are three Russian digital wallet payment systems with wide acceptability on binary options platforms. Transactions are concluded instantly.
- Credit/Debit cards: Yandex.Money is very popular among Russian traders. Not only does Yandex.Money act as a digital wallet, but a specially branded debit card which links to local bank accounts is also issued by this provider. China UnionPay is also another card brand which can be used by Russian binary options traders. The extent to which the economic sanctions have affected the use of Western brands such as MasterCard and VISA is presently unknown.
- Bank wires: This is the least preferred channel of transaction, as many Russian banks have been delinked from the international payment system courtesy of the economic sanctions.
Legality & Regulations
What are the legal considerations and regulatory conditions attached to the conduct of the brokerage and trading of binary options in the Russia? Binary options in Russia are presently unregulated. This may change however, as the Russian Central Bank (CBR) is considering creating a regulatory framework that would classify binary options trading as a separate asset class from other forms of investment. The motivation for this is that many Russian binary options traders have been victims of elaborate scams from unregulated brokers. Under the new dispensation, a comprehensive consumer education guide will be produced and disseminated to citizens. Russian traders would then be able to differentiate genuine binary options products from the scams.
Here are the frequently asked questions regarding the conduct of binary options in the RUSSIA.
- Are binary options legal in Russia?
Answer: The trading of binary options is considered legal in Russia.
- Is it safe to trade binary options in Russia?
Answer: The lack of regulation of the market as well as a serious dearth of consumer education has exposed Russian traders to some elaborate industry scams. It is presently unsafe to trade binary options in Russia.
- As a Russian citizen, am I allowed to trade binary options with offshore brokers?
Answer: There is no law expressly prohibiting this, and Russian traders are flocking to offshore brokerages.
- How do I check the status of a binary options broker?
To check the regulatory status of a broker in Russia, it is better to find out the location of the broker and check with the country regulator.
- Are Russian binary options traders allowed to use digital wallets?
Answer: Russian traders are allowed to deposit and withdraw funds using WebMoney and Yandex.Money.
- What is the role of the Russian Central bank in binary options?
Answer: The CBR presently plays virtually no role in binary options. However, it intends to start providing consumer education as part of a wider regulatory framework. This is still in its infancy as the bank is consulting widely on this issue.
Best Binary Options Brokers in Russia
As described earlier, there are no brokers with a physical presence in the country. Most binary options trading is done with offshore brokers. The top binary options brokers in Russia are those that have a Russian language interface, provide WebMoney and Yandex.Money as transaction channels, and are regulated. Some of these brokers are as follows:
The continued lack of appropriate regulation of the binary options market in Russia is starting to pose problems for the populace. The problem seems to be a lack of appropriate education of how to recognize genuine brokers from unscrupulous ones. This is the gap that the CBR intends to close.
It remains to be seen how the CBR will react to the recent approval of forex and sports betting in the country. Perhaps the sports betting industry may give some direction as to how to regulate a financial product such as binary options, which is still considered as a form of betting in many countries.