Are Binary Options Legal in Russia?
Are Binary options legal in Russia? This question has become very current. After discovering the forex market, Russian traders invaded this field by the thousands, turning forex investments into one of the most popular financial tools in Russia.
Now the binary options field is moving in a similar direction. With more and more Russian citizens becoming familiar with binary trading, the obvious question becomes: are binary options legal?
As always, we start with an answer: Russian citizens can trade binary options without any significant restrictions. It is allowed to open a account with a binary options broker, transfer funds to such an account, and most importantly: receive the profits you have earned.
Now let us understand the legal situation of binary options in Russia.
The Russian Binary Options Market
Binary options have expanded worldwide since they were introduced into the markets in late 2008. Only recently binary options trading has raised interest from Russian investors, especially as a result of the large assemblage of Russian forex traders.
Investors seeking to enter this fascinating market will be faced with two choices: opening an account with traditional binary options brokers, or with local firms that have entered this market.
What is the difference?
Binary Option Brokers in Russia
From a legal standpoint, there are apparently no differences between opening an account with a local binary options broker or a foreign one. Yet, in reality, in order to protect themselves from new legislations, Russians are advised to prefer the traditional, not Russia-based brokers. Why?
Capital outflow in Russia has been a long-standing concern, one that has increased in recent years. While Russian citizens are not restricted in their right to open bank accounts outside of Russia, the outflow of capital has been significant. The Russian Federation has been trying to establish laws that will give the government more power to oversee the outflow of cash and avoid tax evasion. It has not worked so far.
Nonetheless, local binary options brokers will come under mush scrutiny soon. Would you, as a customer, rather invest in an independent foreign binary broker, or in one that is being closely monitored by the government?
Forex Regulation in Russia
Binary options trading is regulated in Europe and around the globe. The significance of regulation is that firms which offer financial services, and take the clients’ monies, may only do so if they have means to guarantee, at all times, their ability to return those funds to the customers.
Although it is legal to trade binary options in Russia the lack of regulation of some brokers is, nonetheless, a serious risk factor. A similar situation exists in part of the forex field.
With hundreds of thousands of Russian traders participating in the forex market, the Federal Financial Markets Service (FFMS) which regulates financial activities in Russia, decided to create regulations for Russian firms offering forex investments. Although the decision was take in 2008, actual regulation has not occurred yet.
Binary Options are Legal in Russia – Where to trade?
Now that you know that binary options trading is legal in Russia, and that local companies face more juridical questions than foreign binary brokers, you must choose which binary options broker to invest with
Here is a list of the top binary options brokers that are lawful and trustworthy:
- TopOption – The largest binary options broker has a Russian site, and an easy to use trading platform. Very reliable, this experienced broker knows the legal and administrative peculiarities of dealing with Russian clients
- OptionWeb – Another experienced broker, this pioneer of the binary options field also has a fully functioning site in Russia, as well as the knowledge of how to operate in the Russian federation
- StockPair – This broker has both a Russian site and customer service given by native Russian speakers. StockPair is a well known binary options brand name, ingrained in many markets throughout the world. This strength will offset the risks resulting from the lack of regulation
Binary Options Brokers Regulation
The main concern for Russian authorities is related to local investment firms which create off-shore companies and thus operate as foreign companies while in fact being Russian corporations.
The local binary options field faces similar issues. Russian brokers offering binary trading services are mostly branches of larger, popular sites, offering all types of high risk investments.
Since the government is eyeing these companies with the intent of regulating them and enforcing them to transfer back to the Russian markets and thus create a tax surplus, binary options traders in Russia are better off depositing their money with well established, experienced binary options brokers.
Statutory Restrictions on Binary Options
The only limitations to clients seeking to invest in binary options in Russia are related to regulations on foreign deposits from and to Russia.
What this means is that transferring funds to certain foreign banks and/or countries is illegal according to Russian, and international law. These laws seek to disallow money laundering by criminal organizations.
Likewise, some binary options brokers have had problems when attempting to transfer funds back to their Russian clients. Costs and bureaucracy for such credit card operations in Russia re higher and more complicated than in most large financial markets, forcing brokers to review their procedures.