Russian Central Bank outlines crowdfunding regulation
MOSCOW, November 9 (RAPSI) – Russia's Central Bank said in a statement on its website on Wednesday that a concept of crowdfunding regulation is ready.
The bank envisages the regulation to be carried out along three main avenues: regulation of activities performed by crowdfunding platforms and creation of standards to be met by their owners and managers; development of standards regarding securities issuers (offered at a platform) and borrowers; creation of standards to be met by lenders and investors using a crowdfunding platform.
At the same time, the regulator believes, supervisors, although considering the risks peculiar to this market, should not hinder the development of efficient crowdfunding business models.
The Bank of Russia Service for Protection of Financial Services Consumers and Minority Shareholders responsible for the concept development envisages a phased introduction of crowdfunding regulations via monitoring and voluntary provision of data requested by questionnaires from the platforms, development of standards governing their classification and registration, submission of reports, and the introduction of requirements to financial performance and risk management systems at a later time.
According to the Central Bank, protection of consumer rights has been the priority of the regulations development.
The preparatory work included monitoring of crowdfunding platforms, what permitted to identify both various factors facilitating growth, and main risks the borrowers and investors encountered in this market.
The working group is to discuss the concept and to present its proposals to the regulator; the proposals should be taken into account when developing a road map of transition to crowdfunding market regulation in accordance with the Basic Guidelines for Development of Financial Markets in Russia for years 2016 – 2018.
At the moment, as the Bank of Russia believes basing on the observed disproportions of different segments and high volatility that this market is only at its forming stage.