The team here at Binary Options Wire has painstakingly prepared a comprehensive, up-to-date report on the Russian Binary Options market, which is an emerging market offering an abundance of opportunities and holding a great potential. This dedicated country report is therefore an invaluable tool and an essential reading for all those considering of investing in binary options in Russia, providing the necessary understanding, knowledge and inside tips that will lead potential investors in binary options vehicles to place successful trades and take away some profits.
The story and track record of the binary options market in the Russian Federation is very similar to that of the retail forex field. As was the case when the Russian traders rushed to enter the forex markets by the thousands, soon after they discovered the world of forex trading, so went the story with binary options trading as well, which has enjoyed increased popularity over the recent period, turning binary options trading into a very widespread financial vehicle for traders in Russia.
Taking this increased trader interest into account, it is only natural for one to wonder whether investing in binary options is a legal activity in the Russian Federation. The answer to this question is not 100% straightforward, however we will venture to draw a picture as accurate as possible about how things really are.
In a nutshell we can safely argue that Russian citizens are allowed to trade through binary options without any significant restrictions. For example, they are free to set up a trading account with a binary options broker, fund this account and withdraw the profits they manage to earn through their trades. However, the legal situation pertaining to binary options trading merits some further analysis.
The Russian Binary Options Market
As a natural evolvement of the booming Russian forex market and the abundance of traders in it, binary options have also found a loyal crowd of followers in the Russian Federation, although this has taken some time to occur, if one considers that binary options were introduced to the markets a while back, in 2008. As interest in binary options trading by Russians is consolidating and also growing, these traders are faced with the choice of opening an account with one of the “international”, traditional binary options brokers or opt for one of the local firms that have recently joined this market segment. Although some might thing that this kind of decision is not very important, there are significant differences between these two choices.
Binary Option Brokers in Russia
If seen strictly from a legal standpoint then opening an account with a local or a foreign binary options broker shouldn’t make any difference. However, it has become an accepted fact that those in the know advice Russian traders to prefer the worldwide, well established, traditional, non-Russian based binary options brokers. The reason for this is that Russian investors would like to protect themselves, their rights and their money from strict government and pertinent authority regulation and control, and thus prefer the foreign based brokers.
For some time now the Russian Federation government has been trying, without significant success, to enact new pieces of legislation that will enable the authorities to better control the outflow of cash from the country and also to provide it with weapons in its fight against tax avoidance. Indeed capital outflows from Russia had recorded an upward trend, a development that raised concerns at the government level. However, it is only natural that this would occur so long as Russian citizens could freely open bank accounts abroad and sent their money out of the country.
Clamping down on capital outflows is definitely the plan ahead for the authorities and naturally this will entail much stricter scrutiny for the local, Russian-based binary options brokers. The valid question then emerges for a Russian investor of binary options; shall one invest through an independent foreign binary options broker or choose a local broker knowing that the latter will closely monitored and scrutinised by the government?
Binary Options Brokers Regulation
What particularly worries the Russian government is the practice being employed by most local investment firms, which set up off-shore companies in foreign jurisdictions and thus manage to operate as if they were foreign companies, while in fact they are truly Russian ventures. This trend is also reflected in the situation in the retail binary options in the Russian market, where most of the Russian brokers who offer binary options as an investment vehicle are actually local branches of larger, global sites offering an extensive range of high risk investment products.
Since the government of the Russian Federation isdetermined to turn its attention on such companies in order to regulate them and oblige them to repatriate their funds and operations with the aim of creating a tax surplus for the Russian public finances, those wishing to trade through binary options in Russia are perhaps better off depositing their money with international, long-established, traditional brokers rather than small, newly-set up local brokers who will have the government breathing down their neck.
Statutory Restrictions on Binary Options
In reality the significant restrictions when one seeks to invest in binary options trading in Russia, pertain to the strict regulations which govern the issue of the transfer of foreign deposits to and from the Russian Federation. Mostly as part of both local as well as worldwide efforts to combat money laundering, especially by criminal organisations, provisions in both the international law and the Russian legislation render it illegal to transfer funds to specific foreign destinations and/or banking institutions.
Indeed binary options brokers operating in Russia have faced problems when trying to transfer funds back to the accounts of their Russian clients. Another challenge that the brokers are face with, forcing them to review and changes their procedures, is the very high cost and increased bureaucracy that is associated with credit card transactions of this kind in Russia.
Having established two basic facts, i.e. that trading in binary options in Russia is considered legal, but also that local brokers are burdened by greater juridical difficulties when compared to foreign binary options brokers, you are ready to take your pick and decide which binary options broker you will choose to trade through and trust with your money. As always, binaryoptionswire.com wants to make your life easier, so here’s a list of brokers that we consider trustworthy for trading binary options in Russia:
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.