Mobilization has come to the markets

The Bank of Russia sent recommendations to professional participants on how to support mobilized Russians. According to brokers, the most effective measures are those that propose to refrain from charging clients a commission in the event of a negative position on their accounts. Meanwhile, the implementation of the recommendations remains on the conscience of professional participants, who, if they wish, can easily find reasons to refuse a mobilized client, experts believe.

The Central Bank sent a letter to professional participants in the securities market (Kommersant has it), in which it recommended taking a number of measures to support the mobilized Russians. On the evening of November 7, the regulator published the main provisions of the letter on its website.

In particular, professional participants are advised to provide for the possibility of changing the terms of payment for the service, including the subscription fee (in terms of reduction or cancellation), as well as restructuring or writing off the accrued service fees. In addition, the regulator asks to refrain from charging such clients a commission on uncovered positions in the event of a negative position on their accounts.

According to the Central Bank, it is necessary to ensure “restructuring of debts in terms of commissions on uncovered positions provided by a broker on a loan of cash and securities, with the provision of individual conditions for the restructuring of these client debts, taking into account the financial situation of clients and (or) other circumstances determined by the broker independently “. The Central Bank asks to refrain from exercising the right to foreclose on the property of clients in order to pay off debts.

Finally, the Central Bank recommends that clearing organizations ensure that trading participants acting in the interests of mobilized clients receive a refund of the commission on operations aimed at the forced closing of positions.

Customers should be able to apply for support by the end of 2023. It can be provided for the period of mobilization plus 30 days, the Central Bank specified.

For those mobilized investors who use margin debt, the most effective measures will be those that offer the broker to refrain from charging clients commission on uncovered positions, Dmitry Lesnov, head of the Finam client service development department, believes. “The importance of the prescribed recommendations depends on each specific situation. For some, the abolition or reduction of the subscription fee or interest on a margin loan is a significant savings,” he said.

Ivolga Capital Managing Director Dmitry Alexandrov agrees that the most important part of the letter concerns customer support in the event of a margin call. Obviously, the mobilized investor will not be able to manage his portfolio and the risk of forced closing of positions is growing, the expert explains. In such cases, the Central Bank recommends being loyal to the client, restructuring the debt on commissions and on the position itself, and not collecting property to cover losses. “In my opinion, this is the right measure, and it is unlikely to lead to losses for brokers. Mobilized citizens do not have large open positions, so solving the problems of individual clients will not harm the broker as a whole,” says Dmitry Alexandrov.

At the same time, Dmitry Lesnov clarifies, the introduction of these recommendations into internal accounting systems can create difficulties for professional market participants.

Otkritie Investments “wouldn’t say that any measures are more important than others.” “In general, the range of opportunities that we plan to provide to clients is associated with point-to-point communication for each specific client facing mobilization with a broker to discuss debt restructuring options,” the company added.

Mr. Alexandrov at the same time draws attention to the fact that the implementation of support measures implies the need for the client to contact the broker with confirmation of his participation in a “special military operation”, however, “according to the experience of similar measures in other industries, citizens are rarely able to correctly draw up documents, and a professional participant will almost always have formal opportunity to refuse.

Ksenia Kulikova