The conflict may be caused by upcoming legislative initiatives to regulate the FOREX market in Russia.
MMSIS considers all accusations against it from the Central Financial Institution (CRFIN) to be groundless and far-fetched, and the situation that CRFIN inflated by blacklisting MMSIS is nothing more than a competitive standoff and an attempt by an organization created by several private companies to seize control of the market by assuming regulatory functions.
We were able to contact the MMSIS press service by phone and obtain comments on the situation with the accusations from the Central Financial Institution:
"This situation didn't arise out of nowhere; it was preceded by a series of events that led to it. It all began when three companies—Alpari, Forex Club, and TeleTrade—decided to create the CRFIN organization, which they hoped would give them an additional advantage over their competitors.
The organization's goal was to convey to a wide audience the idea that it regulated the FOREX market. However, this was in fact untrue, as the FOREX market is unregulated in Russia.
But according to its creators, this private organization was supposed to give its founders the right to dictate their terms of operation in the market by blackmailing other companies, who, if they refused to join the organization, risked ending up on its so-called "blacklist" and, consequently, damaging their reputation in the eyes of potential clients.
We met with representatives of Alpari, Forex Club, and TeleTrade and engaged in a dialogue about preventing market conflicts and creating a truly transparent, regulated market where all participants would have equal operating conditions. However, this didn't suit the founders of CRFIN—they wanted to maintain an advantage and also for MMSIS to eliminate some of its products and marketing solutions.
We couldn't agree to this, as it would essentially be blackmail. CRFIN management suggested we disable the Index TOP 20 program, limit the publication of traders' past income, eliminate the bonus program, and abandon the affiliate program.
In fact, our company is now being accused of being a pyramid scheme because it pays for attracting clients and advertises traders' returns of over 100% per annum.
But such profitability publications, and even several times greater ones, are also found on the websites of the CRFIN organizers. They also use bonuses for account replenishment and affiliate programs, within the framework of which they pay people for the clients they attract.
It turns out that if these are signs of a Ponzi scheme, then Alpari, Forex Club, and TeleTrade also fall under the same category. And if they claim that MMSIS is a scam or operates dishonestly, the same can be said about them and their organization, CRFIN, which, it turns out, is covering up their illegal activities.
We could say and publish a lot, but we think about the market and want it to develop, and for people to believe in it and invest, instead of reading about conflicts in it.
It's obvious to everyone that dirty tricks were used against our company, because such announcements, for example, that our company guarantees income, or that we don't warn people about the risks, are simply absurd.
Anyone can visit the company's website and see a risk notice on the main page. Moreover, no one can register on our website without familiarizing themselves with the risks.
This is just one example of how the accusations against MMSIS are based on lies.
But we'll rise above it. We're 100% confident we're right and are already preparing a lawsuit to prove that the information on which the CRFIN's accusations against our company are based is untrue, and that the information disseminated is false and orchestrated."
Sergey Kovalev, deputy director of the largest association of Forex traders (IAFT), which represents over 100,000 traders, believes that this conflict is caused by nothing other than upcoming legislative initiatives to regulate the Russian FOREX market. He also believes that we are simply witnessing established players attempting to undermine a young and rapidly growing company that is gaining popularity among traders. According to Sergey Kovalev, according to the IAFT, which represents the largest number of traders in the market and reflects their attitudes toward various companies, MMTSIS receives no more client complaints than Alpari or Forex Club, which are the accusers.
According to Fyodor Lebedev, lead analyst at FxFactor, the leading monthly specialized publication, the companies currently involved in the conflict are essentially no different. They all have trust management programs, although some call them PAMM, while others call them Index TOP 20. All companies have affiliate programs and bonus systems, and all publish traders' historical income, which exceeds 100% per annum. Therefore, it's safe to say that the authors of the accusations leveled at MMSIS could apply to themselves.
Fedor Lebedev: "We are the first glossy magazine in Russia about the Forex market, which has been published for over two years, and we, perhaps, know more about the Forex market and its behind-the-scenes life than anyone else.
I can confidently say that over the past two years, during which I have been closely monitoring the market, all leading companies in the industry, including Alpari and MMSIS, have used the same tools.
The market is highly competitive, and if one player develops a new technology, it typically takes 1-2 months for others to implement a similar innovation. Therefore, all the companies' core developments are identical, as are the legal frameworks, which are built in an unregulated market through the use of non-resident companies.
Of course, things are different in regulated markets, but Alpari, for example, doesn't have a PAMM program there, because it can't be used in America in the opaque form it takes in Russia.
Therefore, if we are talking about the opacity of the Forex market in Russia, then we can confidently say that, at the very least, all companies that use services like PAMM in the Russian market are, by definition, not completely transparent, as there are no legislative mechanisms for monitoring the work of traders participating in these programs."
As Marina Skorkina, head of the Center for Regulation of Relations in Financial Markets (CRFM), which unites 20 forex brokers, notes, the actions of the CRFM organization are carried out only in the interests of a select few companies:
"If we talk about what CRFIN is, it's not particularly different from TsROFR or KROUFR, which, incidentally, was also created by CRFIN's organizers. Any company in the market can create such an organization and talk about oversight.
As for the public activity on the part of the Central Financial Markets Agency, this is, in essence, simply an attempt by one of the existing organizations to seize authority over the future regulation of the FOREX market.
Now, the Central Financial Markets Commission, like any organization that claims to regulate the FOREX market, is acting dishonestly and deceiving people.
It can also be argued that if MMSIS exhibits the characteristics of a financial pyramid scheme it is accused of, then the same characteristics are also present in Alpari, Forex Club, and TeleTrade, whose homepage advertises returns of over 1000%, yet this somehow doesn't prevent this company from being a member of the CRFIN and making decisions regarding MMSIS.
These are facts that anyone can verify. There's no escaping such facts. It's a paradox that a company whose website lists a 1000% return is, through its subsidiary, the Central Financial Institution, accusing another company, whose return is just over 100%, of listing an excessively high return.
But the most important thing is the very nature of CRFIN's operations: they are built on deception. CRFIN member companies claim on their websites that they are regulated by the organization, yet they actually operate on behalf of offshore companies and accept clients' money through companies other than those registered with CRFIN.
In other words, the CRFIN "regulates" some companies, while the money flows to others. This is also a fact that cannot be disputed and is easily verified.
Our organization, for example, monitors the quality of work of brokers who have joined us, but we do not say that we regulate them or that they operate in Russia on behalf of Russian enterprises, because this is not true.
However, our colleagues allow themselves to do this, while attributing to themselves the highest standards of conducting FOREX activities in Russia.
In this regard, we, like CRFIN, filed a complaint with the Central Bank seeking the regulator's assessment of the brokers who organized CRFIN, when offshore companies operate under the cover of a Russian organization.
We firmly believe that regulation of the forex market in Russia should be carried out by a government agency, not a private organization. Only such an approach can lay the foundation for fair competition and future development of the forex market."
The law regulating the forex market was adopted in its first reading in June 2013. However, it has yet to be enacted, as many professional participants have criticized it. According to professional financial market participants, the version adopted in the first reading essentially legitimized the existing state of affairs in the market, effectively eliminating any government regulation. By the second reading, parliamentarians plan to introduce a number of significant amendments to the bill that will strengthen the state's role in future forex market regulation, which, in turn, will standardize the rules for competition among market participants.
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