Unqualified investors should have to access securities of issuers from "friendly" jurisdictions - MinFin
MOSCOW. July 26 (Interfax) - Russian unqualified investors should have access to foreign securities (FS) issued by issuers from "friendly" jurisdictions, the Finance Ministry said.
"In the opinion of the Finance Ministry, FS issued by issuers from 'friendly' jurisdictions should be accessible to unqualified investors. This will facilitate opportunities for diversification of portfolios to reduce risks and integration among friendly financial markets," the ministry's press service told Interfax.
The Finance Ministry also voiced its opinion on qualification of investors, remarking that this should be based on verification of knowledge and understanding of risks rather than the amount of assets held.
"Essentially, separate testing is needed. Increasing property qualification, in our view, will not make it possible to verify understanding of the market," the ministry said. The Central Bank of Russia earlier proposed to raise the minimum amount of assets that enables an individual to secure the status of a qualified investors from 6 million rubles to 30 million rubles.
On July 19, the CBR announced plans to restrict unqualified investors' access to trading of a number of instruments, foremost foreign financial instruments.
"An important matter is that we need to treat the instruments that we allow to be traded by unqualified investors taking into account the realities, and we will restrict access and the possibility of increasing positions for unqualified investors on foreign financial instruments, including as realized risk," CBR deputy governor Philipp Gabunia said, presenting a concept for improving protections for retail investors.
Later, on July 20, the CBR published a letter in which it recommended that brokers refrain from selling the securities of foreign issuers to unqualified investors and block this option in mobile apps.
"The Bank of Russia recommends professional securities market participants who conduct brokerage activities refrain from offering persons who are not qualified investors the securities of foreign issuers, with the exception of the securities of foreign issuers issued in accordance with Russian legislation, foreign securities issued by the Finance Ministry and the shares of foreign issuers who conduct their core activities in the Russian Federation," the letter, posted on the CBR's website, said.
It also recommended that market participants "make changes to software used for brokers' remote interactions with clients (including in mobile apps) as quickly as possible that prevent the ability of persons who are not qualified investors to give instructions to acquire the securities of foreign issuers."
However, the ability to give instructions to dispose of such securities and close previously opened short positions must be maintained, the CBR said.
