The temporary regulatory easing implemented by the Bank of Russia because of the coronavirus outbreak has helped mitigate the adverse consequences of the pandemic for individuals, financial market players, and the economy. A range of the earlier announced regulatory relaxations expire on 1 July 2020. In this regard, the Bank of Russia has considered whether it is reasonable to extend the effective period of this regulatory easing.
1. A substantial part of companies’ staff continue to work remotely. Accordingly, it may be complicated to comply with certain requirements of the legislation. In addition, it is essential to continue to deliver financial services to clients remotely. Therefore, the Bank of Russia has decided to extend the following regulatory relaxations:
- Through 30 September 2020, banks may open bank accounts to clients without the personal presence of an individual opening an account or his/her representative, provided that a bank account opened in this period is needed to make or receive socially important payments.
- Through 30 September 2020, banks may open a bank account to an individual entrepreneur or a legal entity without the physical presence of a person opening a bank account or his/her/its representative, provided that a bank account opened in this period is needed to a person classified as a small or medium-sized enterprise to obtain a loan for urgent needs in order to support and maintain employment.
- Through 30 September 2020, banks are allowed to continue to provide services to clients in the case of the expiry of the identification document of an individual client, a client’s representative, beneficiary, or beneficial owner. In addition, through 30 September 2020, banks may not reject new individual clients only because their identification document expired.
- Through 30 September 2020, credit institutions and non-bank financial institutions may be subject to enforcement measures for breaching the procedures and deadlines for the submission of information pursuant to Articles 6, 7 and 75 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, as well as the timeframes for the development and approval of the dedicated internal control rules, only in the case any facts of gross violations of the above requirements are detected.
- Through 30 September 2020, authorised banks shall not be subject to enforcement measures for breaching the deadlines for the submission of information to the foreign exchange control authorities in accordance with Bank of Russia Ordinance No.
4512-U, dated 30 August 2017. - Credit institutions are entitled not to take into account the period from 30 March 2020 through 30 September 2020 when calculating the deadlines within which residents shall submit certificates of confirming documents and documents related to the conduct of foreign exchange transactions.
- Through 30 September 2020, legal entities (their officials) shall not be subject to enforcement measures if legal entities breach the deadlines for fulfilling their obligations to maintain their insider lists as regards their changing (updating) and to notify persons put on their insider lists.
- Through 30 September 2020, legal entities shall not be subject to enforcement measures for the submission of a limited content and/or amount of insider information they shall disclose and for violating the deadlines for sending to the Bank of Russia a notification specifying the part of insider information that is not disclosed.
- Through 30 September 2020, legal entities shall not be subject to enforcement measures for their failure to comply with certain internal control rules for preventing, detecting and suppressing the misuse of insider information and/or market manipulation.
- Through 30 September 2020, a non-governmental pension fund, the management company of investment funds, unit investment funds and non-governmental pension funds, or an insurer shall not be subject to enforcement measures for breaching their obligation to submit certain documents to a specialised depository, and a specialised depository shall not be subject to enforcement measures for breaching its obligation to notify the Bank of Russia of any detected violations of the above obligations committed by management companies, non-governmental pension funds and insurers.
- Accounting infrastructure organisations shall not be subject to enforcement measures for breaching the requirements stipulated by Subclause 6.1.2 Clause 6.1 of Bank of Russia Regulation No.
572-P, dated 27 December 2016, ‘On the Requirements for Keeping the Register of Securities Holders’. These requirements establish the period during which an accounting infrastructure organisation shall accept documents related to keeping the register and receiving information from the register. This period may not be shorter than four hours every business day. Furthermore, accounting infrastructure organisations are recommended to provide services to their clients through remote access systems. This regulatory relaxation remains effective through 30 September 2020. - Through 30 September 2020, professional securities market participants, exchanges, clearing houses, and repositories shall not be subject to enforcement measures for breaching the Bank of Russia’s information security regulations in the course of organising remote access for their staff, except for those business processes that cannot be fulfilled through remote access of employees.
2. As the epidemiological situation is improving and the majority of Russian regions are lifting their restrictions, the Bank of Russia has decided to cancel the following regulatory relaxations:
- The possibility for individuals to carry out transactions using expired bank cards. This regulatory relaxation helped prevent individuals’ visits to bank offices in the self-isolation period. Today, individuals in most regions are free to move, and the majority of bank offices have resumed their normal operation. In this regard, it is unreasonable to extend this regulatory relaxation.
- Non-application of enforcement measures against credit history sources for breaching the deadlines for the submission of the information required by Federal Law No.
106-FZ, dated 3 April 2020, to credit history bureaus (CHBs). The majority of creditors have adequately adjusted their processes of communication with CHBs in the conditions of the pandemic and are thus capable to fulfil their obligations in due time. - Non-application of enforcement measures against professional securities market participants for breaching the deadlines for the submission of their internal control reporting and suspicious transaction reporting to their boards of directors (supervisory boards). The majority of professional securities market participants have adequately adjusted this process and are thus capable to fulfil their obligations in due time.
3. With regard to supervision and supervisory response measures, the Bank of Russia has decided to:
- Resume inspections and contact-based measures in the area of preventive conduct supervision in the organisations supervised by the Bank of Russia.
- Resume the Bank of Russia’s activity related to administrative offence proceedings, with account of the epidemiological situation.
- Recommend that financial market self-regulatory organisations of microfinance institutions, financial market self-regulatory organisations of consumer credit cooperatives, and financial market self-regulatory organisations of agricultural consumer credit cooperatives resume, where needed, their scheduled inspections of microfinance institutions, provided there are no restrictions in this regard in their respective regions.
4. The Bank of Russia has made the decision to progressively cancel the regulatory relaxations related to financial institutions’ reporting and to partially resume the inspection programme. The reporting forms and other information allowed to be submitted in 2020 H2 later than established by Bank of Russia regulations are listed in the decision of the Bank of Russia’s Board of Directors, dated 5 June 2020.
5. The Bank of Russia implemented a significant portion of its prudential regulation relaxations due to the coronavirus pandemic for the period through 30 September 2020. Until the end of July 2020, the Bank of Russia will discuss the course of regulatory easing cancellation with financial market participants, and will make its decision by 14 August 2020 on the extension or termination of these regulatory relaxations.
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