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CB Proposes Insurance for Private Broker Accounts

28.03.2014 16:43 / vedomosti.ru

Plans to set up a compensation fund for clients of brokers that cease operation were aired yesterday at the Exchange Forum by Central Bank’s First Deputy Chairman Sergey Shvetsov. “National Stock Market Participants Association (NAUFOR) is drafting a concept — the risks covered by the fund, the fund’s sources of funding”, said Shvetsov, voicing support for the initiative.

The regulator sees the fund financed by brokers, just as in deposit insurance, however there will be no recourse to state funds that the Deposit Insurance Agency has. “The fund will not be supported by the state, it will not be DIA-based”, stated Shvetsov. DIA is a state corporation that the state has invested in, and in the event of shortage deposit holders will be compensated through a Central Bank or Government loan. Shvetsov says this fund will boost trust in brokerages and the brokers themselves are interested.

“We are currently working on establishing a compensation fund that may be administered by the DIA. So far we have no estimates of dues, the fund’s worth, the amount of coverage is also being debated”, NAUFOR CEO Alexey Timofeev told Vedomosti. He expects the fund bill to be ‘passed in the first reading in 2H 2014 at the earliest’.

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