Private investors will limit the right to trade stocks and bonds

A revised proposal of the Bank of Russia on regulation of private investment presented at a meeting held last Friday, September 9, on the Board of the Moscow exchange, the first Deputy Chairman of the CBR Sergey Shvetsov, said the participants of the meeting. The regulator proposes to divide up private investors into three classes depending on the amount of funds in the brokerage account. We are talking about the so-called unqualified investors savings which do not exceed 6 million rubles.

In the first class, according to the regulator, can be classified as investors who have the amount of 1.4 million rubles. According to the presentation of the Central Bank (has), such private traders are allowed to invest in all the tools the stock and futures market, but it will limit the amount of leverage. “The client cannot lose more than you invested”, — stated in the presentation of the Central Bank. The second class will include those who have more than 400 thousand RUB. They will be able to trade stocks, bonds and currency, but without leverage. All other private investors (with invoice amount less than 400 thousand rubles) will have to reconcile their transactions with financial Advisor (broker).

According to the amendments to the law “On securities market”, which in June 2016 were adopted by the state Duma in the third reading, the role financial advisors can act as a brokers, management companies, financial consultants. They will need to log in to the self-regulatory organization and meet the qualification requirements of the Central Bank.

Without the participation of the financial Advisor to private investors with less than 400 thousand RUB. will be able to buy only OFZ, to invest in deposits, certificates of Deposit, invest in a simple insurance products, voluntary pension insurance and keep the savings in the consumer credit cooperatives. To trade stocks or currency in the stock exchange investors, who are in third grade, independently.

Also, according to the document, out of reach for unskilled investors was the mutual Funds, investors who are now, according to General Director UK “the alpha-the capital” Irina Krivosheeva are more than 400 thousand citizens. Their total assets (excluding interval and closed-end funds), according to the National League of management companies at the beginning of September, was in excess of 122 billion rubles. “our funds, on average, shareholders hold at 150 thousand market average, this figure is lower — about 100 thousand rubles”, — said Krivosheev.

According to her, lack of Funds in the number of permitted for qualified investors tools does not mean that the Central Bank plans to limit citizens ‘ access to the market of collective investments. She recalled that recently, the regulator announced a new structure of mutual funds, providing several categories of PIFs for unqualified investors. However, they will become shareholders of real estate funds, which still were allowed to invest only to qualified investors.

“Overall the rhetoric of the Central Bank became less stringent, the regulator is clearly ready to discuss the impending changes in the investment market”, — said the head of the dealing center “Metallinvestbank Sergey Romanchuk, who is on the Board of the Moscow exchange. He notes that the new proposals, the Central Bank relaxed the requirements for private investors who are still allowed to invest in options and futures, the use of leverage. Previously, the regulator had proposed a ban on individual investors with capital less than RUB 6 million to purchase complex investment instruments, which include derivatives, as well as make them unsecured transactions (transactions with borrowed funds broker). To invest in derivatives and other risky instruments non-qualified investors is planned to enable only with the consent of the independent investment Advisor. In the case of a loss on this EA should claim compensation for investor damages if he invested in instruments with unacceptable for that level of risk.

“The amendments of the Central Bank in fact deprived of the possibility of human capital of 200-300 thousand rubles opportunity to work in the stock market, with 400 thousand rubles is the maximum amount for IMS. It seems that the regulator has decided to kill the project,” — said the President-Chairman of the Board of “Finam” Vladislav Kochetkov.

According to the Moscow exchange at the beginning of September, the citizens opened 143 thousand individual investment accounts. Experts say that introducing limits for qualified investors, the Central Bank at the same time preserved the opportunity for citizens to invest in credit consumer cooperatives. “Under the guise of such organizations are often hidden financial pyramid”, — said Kochetkov.

“The government plans to restrict freedom of access of the population to financial markets. The impression that the Central Bank actively lobby bookmakers and illegal casinos. It turns out that the ordinary citizen will not be able to buy shares in Gazprom through a Russian broker, but can buy an apartment on the stage of the Foundation, to go to the casino in the gambling zone, buy lottery or, say, to borrow from the MFIs,” he added.

Sergey Romanchuk considers that private investors who have less than 400 thousand rubles, will be able to buy their own stocks or futures. “The regulator is considering giving such investors the “right to risk”, limiting the volume of transactions the amount of 50 thousand rubles”, — he said (this amount is indicated in the presentation of the Central Bank).

In August, the national Association of securities market participants (NAUFOR) has sent to the Bank of Russia the letter in which he said that as a result of previously announced proposals, the regulator may drastically decrease the volume of exchange derivatives market, which is dominated by individuals possessing small amounts. According to the Association, 70% of active investors in this market is the amount of security does not exceed 100 thousand RUB, the head of the NAUFOR Alexey Timofeev has resulted calculations according to which in case of introduction of new requirements of the Central Bank only 2% of active investors can fall into the category of skilled, thereby obtaining the right to work with shoulder and buy derivatives.

According to the Moscow exchange, in August the number of active, performing at least one transaction in a month of private investors on the stock market was 83.8 thousand. The total number of listed citizens at the end of August exceeded 1.37 million people. however, as stated in the materials exchange in the first half of 2016, the share of investors-individuals in the trading volume was 35% and the derivatives market — 45%.

Additional graduation unqualified investors, separating them into three classes, each class depending on the amount of cash in the brokerage account, was suggested in the discussion of the proposals of the Central Bank with market participants, have informed in a press-service of the Central Bank. The representative of the Governor also added that after the analysis of the proposals by the end of October will be finalized answers to the questions of the Advisory report that will form the basis of a road map for improving the regulation in this area.

With the participation of Daniel Sedlova