Grandfather clause in non-qualified investor testing: regulator explains
Non-qualified investors with prior experience of trading in specific categories of securities and types of derivatives before 1 October 2021 are allowed to skip testing to obtain access to trading in similar complex financial instruments, explains the Bank of Russia in its information letter addressed to financial institutions.
This means that investors are exempt from the test for a futures trade if a futures trade was made before the introduction of mandatory risk awareness testing, that is before 1 October 2021.
In addition, the regulator explains a procedure for the rule enabling a professional securities market participant and a management company to use an individual’s status as a qualified investor assigned by another financial market participant. Such recognition is not automatic and made at the request of the individual, covering only the instruments for which the investor was previously recognised as qualified.
The information letter includes a number of other provisions to help market participants and investors better understand the new regulation and ensure that the new regulatory rules are successfully implemented in practice.