“On the Securities Market” - Law 39-ФЗ. Changes and Comments

Currently, a special regulatory act on the securities market is in force. The law is designed to regulate the relations that arise in connection with the issue and circulation of financial instruments. The document also defines the features of the formation and functioning of professional participants in transactions. Consider further the comments on the law "On the Securities Market".

Brokerage activity

The Law "On the Securities Market" (2015) defines the main participants in transactions and establishes the scope of their functioning. In particular, brokering is considered to be the execution on behalf of a client of civil transactions with financial instruments or the conclusion of agreements acting as their derivatives. This work is carried out on the basis of contracts of a reimbursable nature. Accordingly, the participant conducting such activities is called a broker. To become a professional, he must know everything about the securities market. The law allows for the purchase by a broker at his own expense of financial instruments that are not placed within the time period established by the agreement when they provide relevant services.

Important point

The broker is obliged to conscientiously execute orders of clients in the order of their receipt, analyze and provide relevant information about the securities market. The law establishes the priority of transactions by order of investors in comparison with dealer operations when combining activities. If the conflict of interests of the client and the broker, of which the first was not notified, caused losses, the intermediary must compensate them according to the rules defined by the Civil Code.

Rights and obligations

The Federal Law "On the Securities Market" allows transactions and conclusion of contracts by a broker acting as a commercial representative of various parties that are not entrepreneurs, including if this is based on the content of the agreement. Obligations that arose on the basis of a contract signed not at an organized auction, each of whose participants is a broker, do not terminate when the creditor and the debtor coincide in one person, if they are performed by third parties or at the expense of various clients in the interests of different investors. The Federal Law "On the Securities Market" does not allow the conclusion of such an agreement if it is carried out with the aim of fulfilling an order that does not contain the price of the contract or the procedure for its establishment. In case of violation of these requirements, the broker is obliged to compensate for the resulting damage.

Accounting finance

Client money transferred to the broker for the execution of relevant transactions and conclusion of contracts, as well as received by the intermediary for them, must be in the account with a credit institution. Moreover, he is obliged to keep records of the finances of each client and provide them with reports. The funds that are in special brokerage accounts cannot be levied on the obligations of a commercial intermediary. He also has no right to credit his own finances to them, except in cases in which a refund is made or a loan is granted. This provision is new in the document. These changes to the Law "On the Securities Market" were introduced by regulatory act No. 281.

Additionally

A broker who acts as a clearing participant, by order of the client, must open a special separate brokerage account for the implementation or enforcement of the relevant obligations. A commercial intermediary may use the funds in their own interests, if this is provided for in the service agreement. In this case, the broker is obliged to guarantee the client the fulfillment of his orders at the expense of these financial resources or their return. The money of customers who have granted the broker the right to use them should be credited to brokerage accounts separate from the accounts of other investors.

Dealer activity

Its features are also defined in the regulatory act "On the Securities Market". The law indicates that dealer activity refers to the execution of transactions for the acquisition and sale of financial instruments at its own expense and on its own behalf by declaring the public purchase / sale value with an obligation to conclude the relevant agreements at set prices. Such actions can only be carried out by a legal entity acting as a commercial enterprise. A state corporation may also be a dealer, if appropriate capabilities are defined in law.

Nuances

In addition to the cost, the dealer is entitled to declare other material terms of the transaction. For example, this may be the maximum and minimum number of financial instruments intended for purchase / sale, the period during which the set value will be valid. If there is no indication in the announcement of other conditions, the dealer must conclude an agreement in accordance with the proposal of the client. If the intermediary evades the fulfillment of this requirement, a lawsuit may be brought against him for the forced fulfillment of the obligation or for compensation for losses.

Forex Dealers

The Law "On the Securities Market" (2015) establishes a list of contracts, the conclusion of which will be recognized by the activities of these entities. It includes agreements:

1. They are financial instruments of a derivative type, the obligations of the parties for which depend on the exchange rate of the respective currency or currency pairs and the signing condition for which is providing the non-individual entity with the opportunity to assume obligations, the amount of which is greater than the amount of security provided by this citizen.
2. The subject of which is foreign currency, the term for the implementation of the conditions for which coincides. In this case, the creditor under the obligation in one of the agreements acts as the debtor under another similar agreement. A condition for concluding such contracts is to provide an individual (not an individual entrepreneur) with the opportunity to take on responsibilities that are greater than the amount of security transferred to the forex dealer.

According to the Federal Law "On the Securities Market", the above transactions may be concluded exclusively in respect of a currency having alphanumeric codes. They are established by the executive power institution, which implements the functions of providing public services in the field of ensuring the unity of the measurement system and technical regulation.

Financial instrument management

A license is not required to carry out this activity if it is associated exclusively with the exercise by a person in charge of securities rights. It includes the trust management of financial instruments, money intended for the conclusion of relevant transactions or conclusion of contracts.

Credentials

Federal Law No. 39 “On the Securities Market” requires a market participant carrying out trust management to indicate his status. If a conflict of interest leads to losses for the client, the responsible person is obliged to compensate them at his own expense in the manner provided for in the Civil Code. The Law of the Russian Federation "On the Securities Market" defines the list of powers of the manager. In particular, the specified participant is entitled to acquire financial instruments and conclude contracts that are intended for qualified investors only if the client himself is such.

Manager Responsibility

The Law "On the Securities Market" provides for a number of consequences for the responsible bidder in case of violation of the requirements of regulatory acts. These include:

1. Assignment of responsibility to the manager at the request of the Central Bank or client to implement financial instruments and terminate the relevant agreements.
2. Compensation for losses to the investor incurred during the sale and termination of agreements.
3. Payment of interest on the amount for which contracts were concluded or transactions were concluded. The amount of interest is established by the rules of Art. 395 GK. If there is a positive difference between the amount received from the sale of financial instruments, termination or execution of agreements, and the amount paid in connection with the acquisition and sale, conclusion, termination, performance of contracts, interest shall be paid in an amount not covered by this difference.

A statement of claim regarding the application of the above consequences may be filed within 1 year from the date of receipt by the client of a report indicating violations committed.

Rights and restrictions

In accordance with the Federal Law "On the Securities Market", the manager must keep records of financial instruments acting as management objects for each agreement. At its discretion, this participant implements all the legal possibilities enshrined in the shares. The trust agreement may establish a restriction on the right to vote. If it is absent, the responsible person bears obligations related to the ownership of financial instruments acting as the object of the relevant transaction. If the manager is not entitled to vote, the Law on the Securities Market (39-FZ) requires him to provide information about the founder. This is necessary to create a list of entities having the opportunity to participate in the general meeting of shareholders / participants.

In addition, the manager, at the request of the founder, is obliged to give an indication of the implementation of the founder's voting right. The responsible person may appeal to the court with any claim arising from his activities, including those whose subjects are shareholders or other owners of financial instruments. At the same time, the costs associated with the settlement of disputes are paid for by the asset in trust.

Depository Activities

As it, the Federal Law of the Russian Federation "On the Securities Market" recognizes the provision of services for storing certificates or transferring and recording rights to financial instruments. The depository, which carries out settlements based on the results of transactions concluded under agreements with the trade organizers or clearing companies, is called settlement. A person who uses the above services is called a depositor. A depositary agreement is concluded between the participants. The RF Law "On the Securities Market" establishes a number of requirements for the agreement. First of all, it should be in writing. The depositary shall approve the conditions under which it will carry out its activities and which act as an integral part of the contract.

Registry-related activities

As it is recognized collection, processing, fixing, storage and provision in the cases established by law of information about the owners of financial instruments. This activity may be carried out exclusively by a legal entity. The subject keeping the register is called its holder. They may be a professional participant in transactions in the securities market. Moreover, he must have a license to carry out the relevant activities. In cases stipulated by law, the holder is another professional participant. The registrar cannot make transactions with the issuer's financial instruments, the register of owners of which he keeps. The information base of the owners is a system of recording of persons to whom personal accounts are open. It is formed at a particular point in time. The register also contains entries about securities that are recorded on these accounts, about encumbrances and other data, the list of which is established in the legislation. The holder conducts its activities in accordance with the regulations of the Central Bank, the rules approved by him. The requirements for the latter are established by the Central Bank.

State regulation

The functioning of the market is controlled by the state. Regulation is carried out:

1. The establishment of mandatory requirements for the implementation of activities by professional participants and its standards.
2. Registration of issues of equity securities and prospectuses, monitoring compliance by issuers with the obligations and conditions established in them.
3. Licensing the activities of market participants.
4. Formation of a system for protecting the interests of owners and monitoring compliance with their issuers and other entities.
5. Prohibition and suppression of activities of persons carried out without a license.

Permission Specifics

Licensing of work is carried out in two ways. Subjects may obtain permission to maintain a register or to carry out activities as a professional bidder. Licenses are issued on the basis of an application. Granting the permission of a professional participant to conduct brokerage activities at the request of the applicant is allowed only upon conclusion of contracts acting as derivative financial instruments, the main asset of which is products. Licensing requirements and conditions may vary depending on operations and transactions carried out in the process.

Suspension and revocation of permits

These actions are the responsibility of the Central Bank. The following may serve as grounds for revocation of licenses:

1. A written bid form by a professional bidder.
2. Repeated failure to comply with the requirements of the Central Bank throughout the year.
3. The absence of a licensed entity at the address indicated in the register.
4. Repeated violation of the deadlines for reporting for more than 15 days (workers) during the year. The milestones are established by federal law and regulations adopted in accordance with it.
5. Repeated violation during the year of the requirements for the provision of materials and information, the list of which is established in legal documents.
   
6. Termination by management of the current work of a professional participant In particular, it is about making a decision on early termination or suspension of the powers of the current executive (sole) body without appointing a new, temporary or absence of an entity performing administrative functions for more than one month without assigning them to another entity that meets the requirements established for a managerial position .
7. Repeated violation of legislative provisions on enforcement proceedings or securities by a professional participant over the course of a year.
8. Other circumstances stipulated by regulatory enactments.

When the Central Bank decides to revoke the permission to conduct professional activities, the organization is obliged to terminate its obligations within the time period established by the Central Bank. Moreover, this period cannot be more than 1 year. Obligations arising from depository agreements must be terminated upon fulfillment of the conditions provided for by regulatory acts of the Central Bank.