Central Bank of Russia considers lowering annual income threshold for qualified investors, currently targeting 12 mln rubles

MOSCOW. April 17 (Interfax) - The Central Bank of Russia is discussing the minimum annual income threshold for obtaining qualified investor status with market participants, with recent adjustments suggesting a reduction to 12 million rubles, the head of the Central Bank's Consumer Protection and Financial Services Accessibility Service, Mikhail Mamuta, said in an interview with Interfax.

In March, the Central Bank published a draft directive with new criteria for qualified investors. The document proposes granting this status with an average two-year income of at least 20 million rubles (excluding proceeds from real estate sales). When combined with educational qualifications, an academic degree or passing an advanced test, the annual income threshold would be 6 million rubles.

The National Association of Stock Market Participants (NAUFOR) did not support the regulator's proposed income level. According to comments sent to the Central Bank in late March, the association advocates a threshold of 6 million rubles, lowering it to 3 million rubles when combined with educational criteria, academic degrees or knowledge confirmation.

"We base our approach on what proportion of potential and current investors have income above the established threshold. We obtain this data from Rosstat and market participants themselves. This gives us an understanding of what volume of assets these individuals could bring to the market. We believe the new criterion - and the income criterion is fundamentally new - requires some caution to avoid opening this door too wide and setting an incorrect value. Therefore, we continue discussions with the market, relying on various data sources and assessments," Mamuta said.

The minimum income threshold will be adjusted in the future, but "not too frequently," he said. "Because frequent changes to any criteria create confusion both for the market and people's behavior. Typically, we adjust such numerical criteria no more often than every few years. Though during initial implementation, faster fine-tuning is possible. This is somewhat experimental, a pilot. When we observe the pilot's effects and market impact over, say, a year, that may provide sufficient grounds for quicker criterion adjustments," he said.