Investment contracts may be executed in bank offices only based on agency agreement with brokers and trustees
The regulator has found that some credit institutions acting as agents of professional securities market participants register this activity as information and advisory services instead of concluding an agency agreement with them. However, in practice, clients sign a brokerage or trust management agreement in a bank office remotely. Moreover, a bank helps future investors download a broker’s or trustee’s mobile application.
In its information letter to banks, brokers and trustees, the Bank of Russia points out that investment contracts with clients may only be executed based on an agency agreement with professional securities market participants. Furthermore, credit institutions must provide a key information document to their clients as well as comply with other requirements established by the Bank of Russia.
Clients must be informed about the nature and risks of financial services that they expect to receive as well as about non-guaranteed yields (since an investment contract is executed at a bank, clients might assume that it concerns a banking product).
Information delivered to a client orally must be consistent with the content of the contract.