Bank of Russia establishes requirements for robo-advisors’ programmes
The regulator proposes to introduce software requirements for investment advice. The draft ordinance is published on the Bank of Russia website. In future, compliance with these requirements will be checked by self-regulatory organisations when accrediting such programmes (SRO NFA and NAUFOR).
Thus, the programme must provide individual investment recommendations based on the client's investment profile, and inform the client about any risks associated with the provision of individual investment recommendations. In addition, the programme must keep the history of actions of both the user and investment advisor and protect the user against unauthorised access and changes to its logic.
Auto-tracking programmes that copy a particular broker's strategy and transactions must keep records of the orders to the broker.
The new approach to regulating robo-advisors is expected to increase the transparency of transactions made with their help, protect consumers of financial products against malpractices, and promote the development of innovative technologies in investment activities.
The draft ordinance is expected to come into force in April 2021. Suggestions and comments on the document are welcome from 27 July to 9 August 2020.