How to notify investors of new fees and terms: Bank of Russia’s recommendations
Brokers, depositories and trust managers should notify their clients if they plan any changes in service fees and terms in advance, at least ten business days before they do so. This is recommended in the Bank of Russia’s letter sent to market participants.
Currently, most financial institutions only publish their rules and standard contract forms with new terms and conditions on their websites, sometimes even just a few days before the effective date. Moreover, they consider that if clients have not sent any objections and use the services according to new conditions, they thus give their consent to the changes by default. As a result, investors often do not receive information about new conditions in due time and do not exercise their right to actually give their consent to or decline the changes. Thus, they have no opportunity to reduce possible costs as much as possible.
The Bank of Russia recommends that any changes should be announced not only on websites, but also through online accounts, mobile applications, emails, text messages or by telephone.
The regulator also urges market participants to guarantee clients’ right to cancel the contracts if they disagree with new service terms.