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Bank of Russia sums up results of first three months of non-qualified investors’ testing

15.02.2022 19:12 / The Bank of Russia

Almost 67% of investors tested before dealing with complex financial instruments succeeded in answering all questions. Moreover, 42.5% passed the test at first attempt, whereas others needed four and more attempts (7.8%). A significant part of those who could not pass the test at first or repeated attempts changed their minds about making transactions.

These are the results of the monitoring held by the National Association of Securities Market Participants (NAUFOR) and the National Finance Association (NFA) and commissioned by the Bank of Russia. It draws on data for October—December 2021 provided by 24 major brokers servicing 19.7 million clients at the end of last year. Over the three months, 2.8 million people took the test.

Mandatory non-qualified investors’ testing started on 1 October. Test questions are to help people evaluate their knowledge and risks that they intend to assume. Since the number of attempts is not limited, an investor can be tested several times in case of negative results. Moreover, even in case of a failure, they can make the planned transaction for a limited amount, if a broker resorts to the right of ‘last word’. Slightly over 20,000 people used this option.

Most often, investors were tested before buying Russian shares not included in quotation lists (18.7% of the total number of those tested), as well as foreign shares not included in key world indices (18.2%). These were followed, by a wide margin, by purchases of Russian bonds with a low credit rating or without it (9.96%) and transactions with other instruments. Specifically, 5.9% and 6.8% of investors were tested to buy structured income bonds and structured bonds, respectively.

Similar results were demonstrated by the first measurement conducted in October 2021.

Financial markets megaregulator