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Bank of Russia established unlicensed brokerage activity by BORSA TRADE Ltd

21 November 2019
Press release

The Bank of Russia established a fact of performing brokerage activity by BORSA TRADE Ltd (Primary State Registration Number 1161832078605; hereinafter, the Company) without the proper licence of the Bank of Russia.

Through its website, the Company engaged individuals in order to carry out internet trading. This involved transactions conducted in exchange trading marketplaces, namely PJSC Moscow Exchange, via professional securities market participants.

Transactions were carried out at the exchange on behalf of the Company. However, the engaged clients—traders actually acted using their own funds, in their own interests and at their own risk. The Company incurred no losses when transactions gave negative results and received profit in the form of a fee when transactions were successful. Therefore, the operations of the Company and its clients—traders were virtually identical to activities of brokers and their customers performed under brokerage agreements.

In accordance with Part 1, Article 39 of Federal Law No. 39-FZ, dated 22 April 1996, ‘On the Securities Market’ (hereinafter, Law No. 39-FZ), brokerage activity is subject to licensing by the Bank of Russia. Pursuant to Part 6, Article 51 of Law No. 39-FZ, unlicensed professional activity in the securities market is illegitimate.

On 18 July 2019, the Arbitration Court of the Udmurt Republic rendered its Ruling on case No. А-71-9861/2019 (hereinafter, the Ruling) initiated by the Central Bank of the Russian Federation, under which the Company was subjected to administrative liability in compliance with Part 2, Article 14.1 of the Russian Federation Code of Administrative Offences.

By its decree, dated 17 October 2019, the Seventeenth Arbitration Court of Appeal left this Ruling unchanged and dismissed the appeal filed by BORSA TRADE Ltd.

In pursuance of the requirements stipulated by Part 6, Article 51 of Law No. 39-FZ, BORSA TRADE Ltd was notified that it should apply to the Bank of Russia for a broker licence.


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