Proportional regulation and risk-based supervision over securities market entities: outcomes of discussion with professional participants

The professional community supported the introduction of criteria whereby securities market entities would be classed not only by the type of its operations, but also by volume (large, average, small); the idea of differentiated regulatory requirements based on a company size was also supported. Overall, market participants supported the Bank of Russia's proposals concerning the regulation of securities market entities – which are based on the concept of proportional regulation and risk-based supervision over non-bank financial institutions.

Market participants also expressed their interest in optimised reporting requirements, specifically, in a softening of such requirements for small companies. Specific proposals on the matter will be crafted by a working group which include BoR representatives, self-regulatory organisations and market participants.

During the discussion the idea of the potential classification of security accounting infrastructures based on their combined / uncombined operations was also raised. The Bank of Russia intends to explore this option in a consultation paper on improving the regulation of security accounting entities.

Based on the discussion results, the regulator presented a roadmap for the rollout of securities market entity regulation. The roadmap outlines steps to take place through 2022.