SRO CRFIN – self-regulating organization Centre for Regulation in OTC Financial Instruments and Technologies, was established in December 2010. Unlike their foreign counterparts, the Association is non-commercial in nature and unites only by the legal persons who are the forex brokers or the news agencies (associated somehow with the currency market in Russia), dealing centers, software developers (trading platforms, platforms, financial advisers – everything that is necessary to the trader for successful work on Forex market).
Membership for brokers in this organization in Russia is not obligatory.
According to the standards of the organization SRO participants are divided into 2 groups:
- “A” – companies with the capital that is more than 15 million RUR;
- “B” – companies with the capital from 2 million RUR. And representing brokers with capital of no less than 50 thousand RUR.
For now (01.04.2016) the number of participants in the self-regulatory organization representing 26 companies. Despite the apparent small number, the membership of the Association have virtually all of the largest Forex brokers in Russia. Compensation Fund in case of bankruptcy of the broker party, due to force majeure, already has more than 1 million RUR and it increases each year.
Functions and objectives of CRFIN:
- development and maintenance of members of the Association the General rules of conducting activities on the OTC market;
- control over the activities of the CRFIN members, publication of black lists of brokers operating in the OTC market of Russia.
Management body of CRFIN is the Council which is formed every 5 years from among the participating broker organizations. Powers of the Chairman of the Board is limited to a period of 3 years, all decisions are to be made collegially. The responsibilities of the Board include the development of standards of CRFIN, the financial statement (auditor’s report concerning the verification of the statements of the company are constantly published on the SRO website).
The organization’s budget is generated by membership fees, the amount of which is set annually at the General meeting.
CRFIN can hardly be called the financial regulator in the truest sense of the word. On the one hand, it is a community of brokers who joined together to work on the standards of transparency and openness to customers. On the other hand, CRFIN can be called a major legal organization that lobbies the interests of its members in the OTC market. Agree, that the market regulator can only be an independent body, and regulating itself just an absurd.
But, if you pay attention to the reasons why the CRFIN puts brokers in black list, and compare their conditions with the conditions of the SRO members, it becomes obvious that there is one of the marketing tools of influence on the market, where some facts of the work of the brokers deliberately distorted in favor of the SRO members. The brokers themselves comment on this point, tactful wording: “still, it’s better than nothing”.
An interesting feature of the organization is the presence of the disciplinary Committee and court of arbitration as a part of it, that protect the rights of traders (investors) and dismantle their disputes (claims) to the SRO’s members and help to resolve issues with other brokers. However, there are not many tools of influence of the organization: “black list” on CRFIN website, or the decision of the matter in the courts of Russia, or the imposition of penalties (in case of violations within the organization by the participants of SRO).
How to become CRFIN member:
- broker, Forex trading company (Forex dealer) submits documents to the Chairman of the Board, and also a number of documents: constituent, a power of attorney to conduct Affairs, etc. (the list of documents can be found on SRO website);
- the decision by the Council of the organization may last about 30 days to pass a comprehensive audit of the financial statements of the applicant, the transparency of the founders, the principles of the broker, its openness to the customers;
- following the positive decision, the broker pays the entrance fee and annual contribution to the compensation (insurance) fund;
- documents confirming the membership is the certificate issued to a new member, the information about the broker shall be added to CRFIM members registry.
CRFIN also conducts training activities, organizing round tables, seminars for those who want to dive into trading on the foreign exchange markets.
Official CRFIN website: http://www.crfin.ru