A new law aimed at eliminating loopholes for pseudo-investment schemes and financial pyramids has come into effect. The legislation mandates that only companies supervised by the Bank of Russia can publicly raise investments from individuals. This includes banks, non-bank financial institutions such as brokers and management companies, and other intermediaries involved in investment raising.
Previously, there was no legal framework regulating public investment raising from individuals. As a result, initiators of pseudo-investment schemes and financial pyramids exploited this gap, offering investments in non-existent entities and dubious projects. The new law aims to protect people from these fraudulent activities.
Under the new regulations, companies raising investments from individuals must either provide securities issued according to laws governing the securities market, investment funds, and mortgage-backed securities or be legally entitled to raise investments in this manner.
The law also specifies that consumer societies, which often concealed financial pyramids, will not be allowed to raise funds from individuals unless they are unit holders in these societies.
Importantly, the law does not restrict the circulation of digital rights or transactions using financial and crowdfunding platforms.