The Bank of Russia conceptualises fine-tuning of investor protection in the financial market

The BoR-developed system for regulating investor categories and defining their investment profile formed the backbone of the road map being drafted to amend the effective financial market laws.

The final version of the concept still determines three types of investors (non-qualified, qualified and professional) and stipulates a differentiated procedure for offering them financial instruments and services. In their turn, non-qualified investors are also divided into two categories depending on the broker account balance.

The regulator determined requirements for each investor type and category, as well as financial instruments and services adequate to their investment profile. In addition, it established the procedure for defining the investment profile and financial advisers’ responsibility for offering customers financial instruments outside their investment profile. Moreover, the concept stipulates the procedure for confirming customer data.

The initial concept was published on the Bank of Russia website on 30 June 2016 in a consultation report. It defined the key issues related to the suggested regulation fine-tuning. The concept was then widely discussed with market participants and self-regulatory organisations. The concept-based bill is supposed to be drafted and made public in 2017.