A long-running process with more than one participant requires formalization. The redistribution of property in the 90s led to the preparation of the law "On the Securities Market". The norm has undergone five dozen amendment forms in 20 years. The difficulties of issuing bonds and receipts, as well as the complexity of securities management, were adjusted.
The legislative framework
The expensive asset sheet is extensive:
- stocks and bonds:
- unit investment trusts:
- checks and bills of lading;
- bills and mortgages.
The Federal Law on the Securities Market regulates the relations of entities in the field of issuing instruments.
The law was created on prepared ground, in parallel with the updated Civil Code and the law on joint-stock companies.
The economic and political alignment of forces within the country and the need to take into account international rules dictate changes to the law. The latest adjustment occurred on December 31. Countries listened to the chiming clock, and Themis ministers approved the amendments.
Definition of a concept
Securities management activity is the functioning of professional participants in the securities market of the securities market under the conditions of trust management of shares and bonds; derivative assets - futures and options; money to buy and sell the listed.
In Art. 39 Federal Law interpreted the key terms of the securities market, lists the types of professional employment and a link to restrictions on combining professional operations on the securities market. In addition, it sets out the rules regarding equity values - their varieties, the order of issue and circulation.
Activity on the securities market
The activities of a professional participant in the securities market as of January 2018 include six types of classes:
- Brokerage. Represent actions on shares and bonds are performed on the basis of onerous contracts with the client at the expense of the client. The law specifies who can be a client - an issuer or a person with free cash.
- Dealer practice is also the purchase / sale of assets, but at their own expense and on their own behalf at a price declared publicly.
- Depository functions - storage of certificates for assets, if issued in paper form, or the creation and maintenance of current accounts on the transfer of ownership of valuable certificates.
- Maintaining a register of owners of valuable assets. This activity involves the collection, processing, archiving and the provision, on a reasonable request, of information on the owners of shares, bonds and other assets.
- Organization of trading in the stock and other markets, services to participants of the securities market for the efficient execution of transactions.
- Securities management activities, contractual relationships with a designated service fee and deadline for trust management obligations: other people's valuable assets in the form of funds for the purchase of shares; already owned assets; money and securities received as a result of operations with the transferred values.
The manager is obliged to comply with the interests of the client and perform profitable operations within the framework of the concluded agreement. For the work done, he has the right to remuneration and to compensation for necessary expenses. Payment for labor and reimbursement of expenses is made at the expense of the facilities of the institution.The client received income from the results of trust management of securities or incurred losses, for the work of the manager it is necessary to pay under the terms of the contract.
Until 2011, the law also ran an article on clearing. Then this work was excluded from the norm and hung by its own rules. Since December 2018, Art. 6 of the Law on Securities Markets will be supplemented by two new paragraphs on investment advice.
Who do the pros think
The securities management activities listed above are entitled to engage exclusively in a legal entity (Article 2). Both they and the individual (IP) are entitled to apply for the role of investment adviser. For applicants, a prerequisite for compliance is membership in a self-regulatory organization of investment advisers.
No matter how hard the professional participant is involved, he bears the title of manager.
The quality factor and legitimacy of the movements of professional participants in the securities market is controlled by the Federal Financial Markets Service - the Federal Service for Financial Markets. KFU controlled by the Central Bank.
Securities organizers and other professional participants exercise internal control through staff auditors.
Board Code
RZB participants are allowed to perform functions on the basis of licenses:
- asset management;
- to maintain a register of owners of market assets;
- on the organization of stock trading (exchange).
The rules for the implementation of securities management activities are enshrined in the decree of the Central Bank of the Russian Federation. The pre-existing “Order ...” code replaces the “Requirements ...”:
- to the regulation of administration of classes on managing expensive assets;
- to the regime of disclosing information on completed movements of assets entrusted to the manager;
- Prevention of conflict of interests between manager and clients.
In Art. 39-ФЗ it is expressly stated that if the actions of the manager conflict with the interests of the client and lead to loss of trust of a trusted citizen, the manager is liable for the damage caused and compensates the client for losses. In addition, restrictions on the combination of occupations have been established.
A company that maintains the register is not entitled to engage in other types of professional practices at the securities market, and a client broker does not have access to depository classes.
Forex dealers are limited to their own occupation, there is no right to combine the functions of a professional participant in the RZB, it is not allowed to engage in other work from the list established by law 39.
It is allowed to simultaneously provide sets of services in the following composition:
- brokerage
- dealerships;
- securities management.
Accounting Rules
The manager is entrusted with the obligation to keep records of securities transferred to him for management. Knowledge of civil law and accounting standards is a mandatory quality of a professional manager.
Values are accounted for separately by each principal. Violation of the accounting procedure by the manager is regarded as an administrative offense with subsequent punishment in the form of a fine in the range of 20-30 thousand or suspension from service for a year. Penalties from legal entities are in the range of 500-700 thousand.
Banks and papers
In addition to traditional banking functions, KFUs play the following role in the stock market:
- the issuer, when the bank issues its own bonds to attract cheap loans or shares to form the authorized capital;
- an investor investing in shares and units of other people's projects with a plan for the subsequent receipt of income as part of the profit of the financed issuer - dividends or coupon income;
- a professional participant in the securities market, performing on the basis of a license the work of a broker, dealer or securities manager.
The activities of banks in securities management include the issuance of loans for the purchase of expensive property, the performance of the functions of payment agents of issuing companies and settlements based on market manipulations.
Professional Assistant
The list of entities managing valuable assets does not include the term “transfer agent”. The Federal Law on the Securities Market does not rank such persons as professional participants. The organization providing the transfer services does not require licensing and joining the SRO.
Transfer agent loads are as follows:
- acceptance of forms from persons registered in the register during asset manipulation;
- accumulation of scripts related to the actions taken with the assets, and sending to the registrar;
- the issuance of forms to persons in the register prepared by the registry holder;
- confirmation of the signature on the instructions of the persons on the register when managing securities.
Exclusively the collection and transmission of information. The registry holder manages the material received: adjusts accounts and prepares statements.