Investors to receive additional protection for OTC transactions and derivative contracts
Only dealers will be allowed to conclude regular over-the-counter (OTC) buy/sell securities transactions and derivative contracts with maturities of three days or more with individuals. Thus, such activities will be fully included in the Bank of Russia’s scope of regulation and supervision. The respective law was adopted by the State Duma today.
The law aims to protect investors. In particular, it will help avoid negative practices in the market, with complex products being sold to individuals by intermediary companies not licensed by the Bank of Russia.
The law also establishes that short-term derivative contracts (with maturities not exceeding three days), which involve higher risks, will become the responsibility of forex dealers. Moreover, the leverage available to forex dealers’ clients will be determined depending on if they are qualified investors or not.
These amendments will come into force 180 days after the law is published, enabling market participants to prepare for the application of the new rules.