Central Bank presented the final version of the bill restricting the work of investors
The regulator has finally decided to tighten the rules for the inexperienced investors working on the stock exchanges, Forbes reports. On June 11, the State Duma finished discussions on this issue with the participation of officials, representatives of the Central Bank, as well as market entities.
The draft version is the final one; it will be presented for subsequent readings in June. Participants from the regulator also clarified that there can be some updates, but no significant changes will be made. One of the brokers, who wished to remain anonymous, said that the meeting was purely formal. From the very beginning, representatives of the regulator indicated that they were not going to amend the project in any way.
The document was discussed more than once, and most of the market participants’ desires were taken into account, said a representative of the Central Bank. He is confident that the draft law shows a consensus between the market and regulators. The Central Bank also asked the deputies to approve the project as soon as possible, since in the conditions of lowered rates, citizens will turn to other financial instruments in search of profitable securities. Elvira Nabiullina, the chairman of the Central Bank, said that as soon as citizens lose money, they want a refund, despite the fact that they acted “at their own risk.” As an example, she cited the situation with the negative value of oil futures, when the majority of market participants suffered multimillion-dollar losses.
Investors often expressed their dissatisfaction with the innovation and stated that the regulations were too strict. Initially, the regulator planned to divide depositors into four groups by skill level, but as a result, it left only two of them: investors will be divided into qualified and unskilled. For the latter, there are many restrictions.
According to the final version of the draft law, absolutely all market participants will be able to conclude repo deals with a central counterparty, as well as purchase government securities, shares from the quotation lists of state exchanges, shares of open, interval and exchange-traded investment funds, as well as bonds with a certain level of credit rating.
Foreign bonds can be purchased only if they represent sovereign bonds of the European Union or the Eurasian Economic Union countries. Obligations will have to be fulfilled by a legal entity in accordance with Russian legislation with a credit rating not less than that established by the regulator. The Central Bank also reserved the right to establish criteria for other instruments so that they can be purchased without restrictions.
In order to expand access, investors will have to pass an appropriate test with a broker. If the depositor doesn’t cope with it, he will be able to reserve the right for the broker to purchase securities for up to one hundred thousand rubles. If the broker allows the investor to invest without verification, he will incur all the associated costs and commissions. This measure won’t affect those investors who worked with risky assets before the introduction of the bill into force.
Market representatives asked the regulator to remove the restriction of one hundred thousand rubles, and also to allow buying securities not from quotation lists. In addition, they made a proposal to allow the purchase of foreign shares. The regulator rejected all proposals. If adopted, the bill will enter into force on January 1, 2022.