The FMRRC (Financial Market Regulations Center) is a non-commercial organisation that was created in order to provide regulation to certain Russian derivative dealers and brokers. However the FMRRC is not a governmental regulatory body with financial regulation in Russia being carried out by the Federal Financial Markets Service (Федеральная служба по финансовым рынкам, ФСФР). The FMRTC is no relation of the governmental regulatory body and is an independent organisation that charges its members a fee to become accredited and regulated by their organisation.
However the Financial Markets Regulation Center has no legal powers to regulate its members. The greatest power that this organisation has is to revoke the membership of those who have opted to become certified by the organisation. If one of its certified members doesn’t implement the decision laid down by them. The idea of such an organisation is to reassure people who opt to deposit money with Russian based contract for difference brokers. As there is no legal framework for the regulation of CFD’s in the Russian Federation, meaning that CFD providers are able to operate without regulation.
However the scope of such an organisation is extremely limited. For example, the organisation has no power to check whether companies have been properly under taking the segeration of client funds or complying to the proper advertising standards etc. So provide scant if any protection for clients who opt to deposit funds with one of their certified brokers. It begs the question of why people would deposit funds with such unregulated entities when their is the option of depositing funds with a number of properly regulated European Brokerage houses.
The most interesting thing about the FMRRC website is the fact that you can’t see a full list of brokers who are meant to be regulated by them which is very intriguing. I see no reason why should risk their funds with a FMRC ‘regulated’ broker. Similar pseudo regulators include the ‘RAFMM'(Russian Association of Financial Marker Members) and others.
- Old-Fashioned Regulators Miss What’s New in Finance – Bloomberg (bloomberg.com)