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

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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.

17 October 2018

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