The Financial Market Relations Regulations Center, or FMRRC, is a financial industry independent organization that was established in 2011 to provide some form of self regulation to Russian derivatives industry players. It is a private entity and is not in any way affiliated to the Russian Federal Financial Markets Service (FFMS, FSFR). The FMRRC charges a membership fee to members to be regulated and accredited by the organization.show more
The primary focus of the FMRRC is to certify the companies that join the organization as satisfying a certain sets of criteria. This process requires that the member applying to join the FMRRC passed a detailed inspection of its operational process. For forex brokers, they must be able to provide fair dealing and services that meets the industry standard. In short, the FMRRC scope of activities includes the following:
At the end of the day, the FMRRC’s ultimate goal is to provide the clients of its member that they are dealing with a trusted and reliable financial services provider operating in a largely unregulated environment.
The idea of the FMRRC was actually conceived in 2011 as a way for Russian forex brokers to be certified and regulated without the involvement of the government. Over the years, membership in the FMRRC grew and today, it has become the organization of choice for Russian forex brokers to be certified and to be able to claim as being regulated to a certain industry standard.
Nevertheless, it should be noted that the FMRRC lacks any sort of legal authority to regulate its members. The only power which the FMRRC has over its members is the power to revoke the membership and accreditation of erring members.
Overall, the existence of the FMRRC has been considered a positive thing especially for Russian brokers to be recognized as having some sort of legitimacy in the industry. Nevertheless, it should be noted that there has been questions as to the relevancy of the FMRRC in view of the fact that the Central Bank of the Russian Federation has since 2013 taken over the role of being the only regulator of the Russian financial industry. The Russian central bank apart from supervising the commercial banks now also regulate non bank institutions such as brokers, funds, asset management companies and insurance companies.
At the time of its inception, the establishment of the FMRRC was considered revolutionary for the Russian forex trading industry. This was at a time when the Russian forex trading market was rife with scams and fraud. However with the Russian central bank taking the role of being the country’s financial regulatory, it is highly likely that the role of the FMRRC will revert to that of a certifying agency as opposed to being a regulatory agency.