Central Bank presented concept of improving private investors protection system

The proposed innovations significantly reduce the diversification opportunities for most investors - they will not be able to invest in foreign projects.

The main news is that unqualified investors will be “temporarily” banned from increasing their positions in foreign securities (they can sell, they cannot buy).

The ban also includes shares from the Hong Kong stock exchange, access to which in recent weeks has been provided by Russian brokers and funds focused on investing in foreign securities.

The restrictions do not apply to Eurobonds of the Russian Ministry of Finance, securities of foreign issuers issued in the Russian Federation, and those that conduct economic activity in Russia.

Brokers and exchanges are already being advised to suspend sales of foreign securities to unqualified investors.

“The goal is to protect investors from the risks of further freezing of foreign securities. According to the Central Bank, more than 5 million Russians already have blocked assets in their accounts, and shares alone have been frozen for 320 billion rubles. But instead of warning investors about the risks, a harsh version of the actual ban was chosen. Only qualified investors will also be able to buy some bonds with structural income and over-the-counter derivatives,” the regulator’s press service explains.

The Central Bank also plans to revise the maximum leverage available to unqualified investors: private investors do not always realize the risks of trading with leverage (even though testing was introduced last year), and this is confirmed by statistics: from the end of February to the present clients' debt to 11 largest brokers amounted to 2.5 billion rubles.

Becoming a "qualified" investor will be much more complicated- the threshold for liquid assets is raised from 6 million to 30 million rubles.