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NAUFOR Expects to Agree with CB on Lower Capital Requirements for Brokers and Asset Managers Early in 2015

23.10.2014 14:48 / Interfax

National Stock Market Participants Association (NAUFOR) is drafting an audit procedure for self-regulating organization (SRO) members who wish to apply for lower capital requirements, NAUFOR CEO Alexey Timofeev told the Russian Stock Market Conference in Ekaterinburg on Thursday.

“For those who want to exercise their option to lower capital requirements, we will have a certain audit procedure in place, to make sure the company voluntarily takes on the standards and complies with them”, he said.

Timofeev added that the procedure standards are undefined so far. “I don’t know yet how this will work, probably through a submission of a request to the Central Bank to allow the company switch to lower capital requirements. We are in progress on this, right now NAUFOR standards are debated in committees”, he said.

Timofeev expressed hope that the Association Board will manage to approve standards in November. “If we do, in December 2014 года - January 2015 we hope to get them approved by the Central Bank and offer the procedure to companies next year”, he said.

On September 1, the Central Bank enacted Directive 3329, defining capital requirements for licensed stock market participants and Asset Management companies of investment funds, share investment funds and non-state pension funds.

The document, for instance, lowers capital minimum for SRO member prime brokerages to RUB 15mn (normal limit for prime brokerages – RUB 35mn). SRO member AM companies have their limits brought down to RUB 5mn from RUB 35mn.

The SRO has to be active for over five years or count a minimum 30% licensed participants (brokers/AM) as members.

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