According to yesterday’s statement by a Russian regulator, foreign exchange (Forex) brokers need to dedicate more of their efforts towards demonstrating acceptable practices in regards to advertising. Tatyana Nikitina, the Russian antitrust regulator in question, stated that FX brokers’ current advertising of their service could occasionally violate the law.
Nikitina pointed this out in a Moscow-based event on Thursday, July 11th. Nikitina is also the head of the FAS (Federal Anti-Monopoly Service) advertising division. She also noted that not all forex trading ads are illegal, but on occasion, quite a few of them can be considered as such.
According to her, some educational services, and even books providing information on currency markets trading are more than obvious examples of proper advertising practices.
Business in need of an example
Nikitina believes that the solution lies in strengthening communication between brokers and advertisers. Together, they could establish a set of legal, appropriate practices within the industry. Further, she also added that the FDA (Forex Dealers Association), which is a self-regulating body for brokers in Russia, need to set an example. They must make a clear point in regards to what adverts are acceptable, so that advertisers, as well as brokers themselves, should know what is off limits.
Nikitina believes that it would be much more effective for a self-regulating organization to come up with positive examples of advertising. The alternative would be to increase fines for bad advertising.
Further, Nikitina stated that this is highly necessary in order for legitimate players in the industry to have proper examples. That way, they can avoid having problems if someone attempts to push through illegal forms of advertising. This would improve their standing with antitrust authorities, and help them avoid issues that might impact their businesses in a negative way. This is what Nikitina sees as the most positive approach to current issues, and believes that it will bring better results than increasing fines.
Not many were left to hear the advice
However, many have started debating whether there is any point to all that Nikitina has said. After all, Russian authorities have pretty much killed the country’s retail industry last year by revoking licenses of most companies that were providing currency trading to their clients. The move came suddenly, and it made a mess in the industry, with the only firms that were left untouched being those licensed as banks.
Other than those, the only remaining companies were those with strong ties to the local authorities. Nobody else was allowed to keep operating, which poses the question — who can make use of Nikitina’s advice? The remaining companies appear to be next to untouchable, while those who could have used this advice were closed or forced to relocate when the authorities revoked their licenses.