The regulator has identified that some credit institutions, acting as agents of professional securities market participants, are registering this activity as information and advisory services instead of concluding an agency agreement. In practice, clients sign a brokerage or trust management agreement in a bank office remotely. Additionally, banks assist future investors in downloading a broker’s or trustee’s mobile application.
In its information letter to banks, brokers, and trustees, the Bank of Russia emphasized that investment contracts with clients may only be executed based on an agency agreement with professional securities market participants. Furthermore, credit institutions must provide a key information document to their clients and comply with other requirements established by the Bank of Russia.
Clients must be informed about the nature and risks of financial services they expect to receive as well as about non-guaranteed yields. Since an investment contract is executed at a bank, clients might assume it concerns a banking product.
Information delivered to a client orally must be consistent with the content of the contract.
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