From 1 October 2021, protection for unqualified investors came into force in Russia. Investors will now be required to undergo testing before making transactions. It is expected to improve people’s financial literacy and help them assess risks before they invest their money.
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According to the new law, an unqualified investor will be able to purchase the simplest and least risky instruments – such as listed shares but also Russian government securities (OFZs) and mortgage bonds – without testing.
The tests will be free of charge and without restrictions on retakes. At the same time, those who fail the test will still have the option of buying any instrument, but for an amount not exceeding 100,000 roubles per transaction and under a special notice of assumption of risk.
Financial institutions will be required to provide citizens with full and accurate information about the transaction and its possible risks. The Central Bank will be able to restrict contracts with unqualified individual investors.
Vyacheslav Volodin, the speaker of the State Duma, said that the new law became especially relevant after the fall in deposit yields, when a large number of inexperienced people entered the stock market. The number of retail investors in Russia is expected to exceed 14 million in October 2021. As a consequence, the number of victims from reckless investments may also increase.