MOSCOW, July 21 (Reuters) - Russian lawmakers on Tuesday supported a plan by the central bank to create a regulatory regime for a growing number of retail investors, allowing them to continue investing in foreign shares.
Russia had earlier wanted to ban retail investors from buying foreign shares but then changed its view amid rapid growth in the numbers of traders. Under the new legal framework they will be able to access U.S. stocks on the Moscow Exchange and U.S. and German stocks on the Saint-Petersburg Exchange.
The lower house of parliament, also known as the Duma, approved the bill in a third and final reading on Tuesday, a week after central bank governor Elvira Nabiullina called for the draft law to be passed quickly given the increase in the numbers of retail investors. She said almost 2.5 million people in Russia had retail investors’ accounts.
The new law will categorise investors in Russia into qualified, or professionals, and unqualified. The latter will be able to buy stocks included in at least one foreign stock market index in a list determined by the central bank.
Retail investors will be also allowed to invest in Russian sovereign debt, domestic stocks and some bonds.
From April 2022, retail investors will have to pass a test to show their understanding of the risks related to buying assets that are not on the central bank’s approved list.
The bill will now go to the upper house of parliament and then to the Kremlin.
The purchase of foreign stocks was in the spotlight a few years ago when the central bank proposed trading restrictions, saying investments in foreign shares would deprive Russia of investment capital.
The Moscow Exchange, Russia’s largest stock market, and its main rival the Saint-Petersburg Exchange have reported a big increase in retail clients this year. Analysts link this to falling bank deposit rates and higher unemployment amid the coronavirus crisis that prompted people to seek a new source of income. (Reporting by Elena Fabrichnaya; writing by Andrey Ostroukh. Editing by Jane Merriman)
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