Passports of financial products

2020: The Central Bank decided to enter passports of financial products to protect Russians from the services imposed by banks

On December 10, 2020 it became known of intention of the Central Bank of the Russian Federation to enter passports of financial products for protection against imposing of services. The regulator drafted the bill according to which banks will be obliged to open to clients of benefit and risks of investments in writing.

In passports of financial products or the key information documents (KID) there has to be a description of service, a condition of an investment of money, guarantees and risks for the client, information on the possible commissions. The seller will oblige to give this instruction before signing of the contract.

The Central Bank of the Russian Federation decided to enter passports of financial products to protect Russians from the services imposed by banks

By December 10, 2020 at sale of difficult tools similar instructions are issued practically by all participants of financial market, including microfinance institutions, non-state pension funds, broker offices, however it still do not do banks. The bill should correct this omission.

The document will be obligatory for banks, insurance companies, non-state pension funds, brokers and microfinance institutions. In bills penalties and other sanctions for banks which will refuse to enter KID are registered.

Adoption of such law will help consumers to understand better features and risks of different financial products and tools, to create the correct expectations from these or those financial transactions — the representative of the Central Bank explained RBC.

Earlier the head of the Central Bank Elvira Nabiullina reported that for unskilled investors who try forces in the stock market will hold testing and will prepare passports of investment tools. In them will begin to list the main characteristics of investment products, their cost, risks and profitability. And for banks which become agents at sale of investment products want to set rules of sale of financial products legislatively.^[1]

Notes