The Russian central financial institution is making an attempt to stem the tide of rubles leaving financial institution accounts
Beginning investors in Russia will soon have fewer opportunities to beat the falling interest rates offered on Russian savings accounts. In addition to the investors themselves, the big losers are likely to trade apps like Robinhood, which are aimed at beginners.
According to a December 30 announcement, Russia's central bank is working to get securities trading platforms to update the risk mitigation measures first passed in July. In its latest announcement, the CBR recommends that securities platforms and applications have systems in place to ensure "the impossibility of executing trades on the platform that result in the acquisition of shares or other securities from foreign issuers by unqualified investors" Except for those approved by the CBR.
The CBR is also working to discourage companies from offering "complicated investment products" – a term broadly in line with leveraged trading or derivatives – to unqualified investors unless the companies offering these investments offer guaranteed returns of at least two-thirds the central bank rate. With a key interest rate of currently 4.25%, platforms would have to guarantee a return of 2.83%.
There is great doubt that the real intent is to protect investors. While 4.5% would be enviable for a US savings account, the instability of the ruble since the sanctions in 2014, and more recently the market crash in March 2020, drove large numbers of investors to the stock market for the first time.
In October, the CBR also issued guidelines to prevent unqualified investors from buying crypto worth more than 600,000 rubles (just over $ 8,000 at the time of publication) a year. These guidelines were part of an explanation of the state law "On digital financial investments", which came into force from the new year.