Central Bank restrictions on unqualified investors. - page 3
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And as far as I understood, the restrictions concern a number of instruments, including shares of foreign issuers, but not shares of Russian issuers. In other words, the idea is to heat up the market and reduce capital outflows.
There is little choice in the Russian stock market and many people still buy foreign stocks. I don't think they will give up their preferences and can just go to a foreign broker. They also want to prohibit the futures market for the unqualified, thus hedging (buy shares, sell futures asprostotrader does) will not be available.
They also want to introduce negative rates on foreign currency deposits.https://www.gazeta.ru/business/2019/09/24/12684277.shtml
I don't think brokers will suffer much from these innovations. All participants providing retail access to the market have ready-made packages of "investment products" prepared just for unqualified investors. Somewhere in '17 or '18 I came across an analytical article which attempted to analyze the real rate of return of such products using historical data. The results were very disappointing. As a result, the author of the article has concluded that selling such products is profitable only for adviser of BC, because he has a huge commission, about 10%. The clients, as a rule, have only a moderate profit, and sometimes even a loss.
Indirectly, these findings are confirmed by the following episode, when I went to BK and while waiting for the consultant I heard one of the employees joyfully exclaiming from the backstage that today he only needs to make one sale of an investment product and insurance (life insurance) and then he will be fully satisfied. The whole thing reminds me of The Wolf of Wall Street, where clients were sold all sorts of rubbish just to get commissions.
Regarding the question of share prices in the Russian market, there is a clear link between the value of securities and their profitability. Expensive securities have low yields and no one is interested in that. By keeping the price at low levels, it is possible to show a yield of around 10%, or at least above inflation and the Central Bank rate. This, of course, does not apply to "growth stories", but such companies either do not pay dividends at all or pay symbolic ones.
I don't think brokers will suffer much from these innovations. All participants providing retail access to the market have ready-made packages of "investment products" prepared just for unqualified investors. Somewhere in '17 or '18 I came across an analytical article which attempted to analyze the real rate of return of such products using historical data. The results were very disappointing. As a result, the author of the article has concluded that selling such products is profitable only for adviser of BC, because he has a huge commission, about 10%. Clients, on the other hand, are usually only at a moderate profit and sometimes at a disadvantage.
Indirectly, these findings are confirmed by the following episode, when I went to BK and while waiting for the consultant I heard one of the employees joyfully exclaiming from the backstage that today he only needs to make one sale of investment product and insurance (life insurance) and then he will be fully satisfied. The whole thing reminds me of The Wolf of Wall Street, where clients were pushed into all sorts of rubbish just to get commissions.
Regarding the question of share prices in the Russian market, there is a clear link between the value of securities and their profitability. Expensive securities have low yields and no one is interested in that. By keeping the price at low levels, it is possible to show a yield of around 10%, or at least above inflation and the Central Bank rate. This, of course, does not apply to "growth stories", but such companies either do not pay dividends at all or pay symbolic ones.
Some "products" still require the status of a quadruplet
I do not think that brokers will suffer much from these innovations. All participants providing retail access to the market have ready-made packages of "investment products" prepared just for unqualified investors. Somewhere in '17 or '18 I came across an analytical article which attempted to analyze the real rate of return of such products using historical data. The results were very disappointing. As a result, the author of the article has concluded that selling such products is profitable only for adviser of BC, because he has a huge commission, about 10%. Clients, on the other hand, are usually only at a moderate profit and sometimes at a disadvantage.
Indirectly, these findings are confirmed by the following episode, when I went to BK and while waiting for the consultant I heard one of the employees joyfully exclaiming from the backstage that today he only needs to make one sale of investment product and insurance (life insurance) and then he will be fully satisfied. The whole thing reminds me of The Wolf of Wall Street, where clients were sold all sorts of rubbish just to get commissions.
Regarding the question of share prices in the Russian market, there is a clear link between the value of securities and their profitability. Expensive securities have low yields and no one is interested in that. By keeping the price at low levels, it is possible to show a yield of around 10%, or at least above inflation and the Central Bank rate. This, of course, does not apply to "growth stories", but such companies either do not pay dividends at all or pay symbolic ones.
However, in order to get the status of a qualum there is a ridiculous amount of money needed in general
https://www.kommersant.ru/doc/4101372?utm_source=yxnews&utm_medium=desktop&utm_referrer=https%3A%2F%2Fyandex.ru%2Fnews
If this article is to be believed, the restriction can be circumvented. That is, an investor can buy the paper he wants if he insists very strongly on it. Quote - Aisha Kubezova, head of methodology at BCS Premier, believes that the main advantage of the new version of the bill is precisely that execution of the order is officially allowed if the client insists on the transaction.
...
If the bill comes into force, the derivatives market will become inaccessible for unqualified investors. And then it will no longer be possible to buy shares and sell futures on those shares.
I wonder, how could an investor be called a qualified investor, if in the beginning of August 2008, i.e. before the crisis, he shorted shares?
The question is, how and most importantly, who is able to judge the qualification of this or that investor on the financial market.
It's about the same as taking on the role of a representative of a mythical creature that lives in the sky.
There is little choice in the Russian stock market and many people still buy foreign stocks. I don't think they will give up their preferences and can just go to a foreign broker. They also want to prohibit the futures market for the unqualified, thus hedging (buy shares, sell futures as prostotrader does) will not be available.
They also want to introduce negative rates on forex deposits.https://www.gazeta.ru/business/2019/09/24/12684277.shtml
I think that the purpose is for people not to put their money in deposits, but to put it in the market, in masses, expecting a higher yield. Now many banks take advantage of a loophole in the law and offer interesting conditions in insurance products, the essence of which is that the individual returns personal income tax and gets a guarantee against loss of invested funds under management. True, I think the person thinks they are transferring to the bank, but that is not the point, the point is that these are very good conditions, especially if the market grows. True, there is usually some kind of restriction on early withdrawal, which is implemented in the form of a penalty as a percentage of the deposit. The terms are usually 3 years. Under such conditions it makes sense to make a trading portfolio out of various offers, and sleep well.
And regarding the fight against currency, it is fair in general, if you think about it, because in fact the deposits should be redirected by the bank to investment or issuance of loans, and not the other cannot be done inside the country. And the more dollars, the more accessible they are - less hype.
I wonder if an investor would have been qualified if he had shorted at the beginning of August 2008, i.e. before the crisis.
It is about how and most importantly who is able to determine the qualifications of this or that investor on the financial market.
It's about the same as taking on the role of a representative of a mythical creature that lives in the sky.
That to become qualified they have the following criteria: if you have money on the securities account more than 1.4 million, the turnover of more than, I do not remember what figure or there is a 1.0 certificate of FFMS. I think that's all I remember, maybe there are other conditions, but I think these are the main ones.
The time frame is usually 3 years. Under such conditions, it makes sense to put together a trading portfolio of different offers and sleep well.
I couldn't get past it...but what country are we talking about where you can entrust your money for 3 years and sleep well?
Let me put it another way to make it clear: investing 200-300 thousand or so does not make sense, we need large sums,
Would you sell your property and invest for 3 years in such an offer to earn a significant amount? - Then you could buy a new flat again and be even better off!
;)
I think that the aim is for people not to put their money into deposits but into the market, in droves, expecting higher returns. Many banks now take advantage of a loophole in the law and offer interesting conditions on insurance products, the essence of which is that a person pays back personal income tax and receives a guarantee not to lose the invested funds transferred under management. True, I think the person thinks they are transferring to the bank, but that is not the point, the point is that these are very good conditions, especially if the market grows. True, there is usually some kind of restriction on early withdrawal, which is implemented in the form of a penalty as a percentage of the deposit. The terms are usually 3 years. Under such conditions it makes sense to make a trading portfolio out of various offers, and sleep well.
And regarding the fight against currency, it is fair in general, if you think about it, because in fact the deposits should be redirected by the bank to investment or issuance of loans, and not the other cannot be done inside the country. And the more dollars, the more they are available - less fuss.
As far as the negative rates on forex deposits are concerned, I am all for that. This will make them convert the currency into rubles. But I do not see the incentive to bring them to the exchange. Those who do not want to part with the currency will take it to a foreign broker and will buy foreign stock for foreign currency.
About the investment insurance products I read on one website, there really is an investment period of 3 years with no guarantee to get the declared yield by the end of the term (indicating only projected yield) but there is deposit loss insurance and as a result the high commission, which greatly reduces the final income. Usually such products are offered by different insurance companies. In the case of early withdrawal there are high penalties. There have been many negative comments about this article, mostly from people who wanted to withdraw their funds early. An investment insurance product is a type of ETF that manages a portfolio of different stocks and bonds and puts your money into this portfolio. The difference from ETFs is the high fees, deposit insurance, and it is not a mutual fund.