20 Jul 2023 12:59

MinFin compiles list of countries whose banks, brokers can trade forex in Russia

MOSCOW. July 20 (Interfax) - Russia's Finance Ministry has drafted a list of 44 countries whose banks and brokers will be allowed to participate in organized trading of foreign currency and derivatives whose underlying assets are forex and interest rates.

The draft government resolution to approve the list was posted on the regulation.gov.ru website for public discussion, which will continue until August 2.

The list was drafted to implement provisions of a July 10, 2023 law (№ 315-FZ) that amended Article 16 of the federal law on organized trading and the federal law against unlawful use of insider information and market manipulation.

The law gives the Russian government the power to approve a list of jurisdictions, banks and brokers from which can be given access to participation in organized trading with a central counterparty of foreign currency and derivatives whose underlying assets are forex and interest rates, which enables trading participants to hedge currency and interest risks.

The law stipulates that the national legislation of the countries where foreign financial institutions that may be granted access to organized trading work must not prohibit the conclusion of purchase-sale contracts for forex and derivatives contracts in organized trading, and that these organizations can carry out transactions in such trading only with the central counterparty.

The requirements for foreign banks and brokers who may be given access to organized trading of forex and derivatives are set by the Central Bank of Russia.

The law's authors intended it to provide the Russian market with the necessary forex liquidity. A memo attached to the law said that now nonresidents from Eurasian Economic Union (EAEU) countries, as well as banks from Tajikistan have direct access to the Russian forex market, and only 21 nonresident credit institutions work on the Russian forex market.

The ministry's list includes the following countries: Azerbaijan, Armenia, Algeria, Argentina, Bangladesh, Bahrain, Belarus, Brazil, Venezuela, Vietnam, Georgia, Hong Kong, Egypt, Israel, India, Indonesia, Iran, Kazakhstan, Cambodia, Qatar, China (excluding Taiwan), Kyrgyzstan, Cuba, Malaysia, Morocco, Mexico, Moldova, Mongolia, United Arab Emirates, Oman, Pakistan, Peru, Saudi Arabia, Serbia, Tajikistan, Thailand, Tunisia, Turkmenistan, Turkey, Uzbekistan, Uruguay, the Philippines, Chile and South Africa.