KROUFR (CRRFMP) – Commission for Regulation of Relations between Financial Market Participants, established in December 2003 and is active till now. According to the rules of the Association (membership in the organization for Forex brokers is not required) the organization does not pursue any commercial goal (obtaining benefits). Originally the structure was created with the aim to establish an ongoing dialogue between the participants in the developing the OTC market and the permanent control over the industry. But the market is growing rapidly, and the Union became a self-regulating organization with clearly defined tasks and functions.
Tasks and objectives of KROUFR (CRRFMP):
- ensuring coordination and interaction between the participants of financial markets;
- preparation of the body (base) of the regulations and standards which are recommended to brokers to the management during the mutual work in the financial market. These standards are designed to ensure their compliance conditions for fair competition and compliance with business ethics;
- research of financial markets (information monitoring) to develop programs to minimize the risk of work that can take place when implementing the standards in the field of financial activities;
- issuance of certificates to members of the Association after passing the preliminary checks.
The governing body of the Commission is the General Assembly, which is headed by the President of the Commission.
It is curious that, being the founders of this organization, three major broker of Russia has not stopped on KROUFR (CRRFMP) membership and in parallel became the founders of another Association – CRFIN in 2010. Currently both associations exist simultaneously, and membership in several associations for Forex broker is not prohibited. However, for broker, it costs extra, but it adds some prestige to traders (clients).
Today KROUFR (CRRFMP) works on the regulation of the interaction between the international finance market in Russia, develops tools and services to the successful operation of its members, monitors the activities of its members, who are issued the certificate, analyzes financial market conditions, resolves disputes.
Peculiarities of resolving disputes and conflicts by means of KROUFR (CRRFMP)
In order to fulfill one of its core functions of the Commission the structure of several departments, responsible for each direction were created. An example is the Arbitration Commission, whose mandate includes taking into consideration, analysis and resolution of claims and disputes to the Forex brokers. At the head of its activities, the Commission puts the protection of the rights of investors and traders, which should, in theory, help to increase confidence to the individual brokers and overall Forex currency market.
Principles of solving the issues and disputes:
- statements and claims accepted by KOUF absolutely from all traders who can be both clients of brokers included in Commission and other brokers and dealing centers ;
- decisions of the Arbitration Committee are binding on members of the association and approved for execution to other brokers;
- claims or applications, requiring professional expertise or investigative actions are not considered;
- issues regarding compensation for loss of profits and moral injuries are not considered;
- applications related to issues that have already been reviewed or are considered by official state authorities (Prosecutor’s office, investigative bodies) are not accepted.
Since 2003, Commission reviewed hundreds of claims, most of which were resolved in favor of traders. However, some situations are still being considered by arbitration, which can be found on the Forum (on organization page).
The specifics of KROUFR (CRRFMP) and CRFIN are somewhat different (which directly focuses on the Commission’s website). The work of KROUFR (CRRFMP) is more aimed at solving disputes and conflicts, analysis of markets, adjustment of dialogue between financial market participants. The CRFIN also works towards the control over the reliability and transparency of each individual broker, and is committed to becoming an official organization for the licensing of Forex brokers.
The Commission is also active in marketing and training areas:
- participates in creating and conducting webinars and conferences;
- initiated the creation of a Forum for the exchange of information, where you can get advice in the sphere of principles of work of brokers, interaction with traders and other things as the representatives of the Commission and from more experienced traders;
- created a section on the the website for novice traders, where it accumulated all the necessary information, based on collected experience of the members of the Association.
The conditions of association membership are classic:
- payment of the entrance fee and the constant introduction of membership fees;
- absolute adherence to the norms prescribed in the statute and observance of principles of work of KROUFR (CRRFMP);
- 2 recommendations from the current KROUFR (CRRFMP) members (the peculiarity of entrance).
When becoming a full member of the Association, the brokers get:
- ability to resolve conflicts and disputes in pre-trial form;
- permission to use the brand and logo on their own website for promotional purposes;
- participation in the development of quality standards of operations in Forex market.
To find participants of this Association was not so simple: there is no unified list on the website (there is one, but there are only 4 participants). Also we managed to find a few more members, but total number was hardly a dozen. Maybe this is an imperfect institutional process or the fact that at least 2 of the leader of Forex market in Russia left the Association and joined the CRFIN over the past 5 years (the Commission loses its reputation), is unknown.
Official CRRFMP website: http://kroufr.ru