Traders of securities will be required to provide reports on the conclusion of “suspicious” contracts
Published: | 04.09.2017 | news
On June 22, 2017, by the Decision No. 460 of the National Commission on Securities and the Stock Market, the changes in the Regulations on the procedure for compiling and submitting of the administrative data on the activities of traders of securities in the NCSSM (Decision No. 1283 of the National Commission on Securities and Stock Market) were made. The innovations provide for the need to give the information on the conclusion of the “suspicious” contracts by the trader of securities. We remind that a “suspicious” contract should be understood as an agreement with the securities on the exchange or over-the-counter market, which price for listing securities and securities used to calculate the stock exchange index differs from the last calculated exchange rate by 20% or more, and for non-listed securities, it differs from the last calculated closing price of the trading day by 50% or more. In accordance with this definition, a “suspicious” contract can be a contract concluded both on the exchange and over-the-counter market. However, guided by the principle of the distribution of reports, according to which the stock exchange itself reports on exchange contracts, the trader of securities is obliged to provide the information only on over-the-counter contracts. This must be done within three days from the date of their conclusion as a part of irregular administrative data. The aforementioned decision of the NSCR will come into force from the day of its official publication, after which each trader of the securities will be obliged to report on the conclusion of “suspicious” contracts. The reference will be required to be provided in accordance with the special form established by the Annex 14 to the Regulation (new annex in accordance with the changes of June 22). It is worth noting that the form of the reference provides for some temporary restrictions on the exchange rate and the closing price with which the trader of securities should compare the current price of the contract to determine the percentage of deviation. So, if the exchange rate / closing price were last calculated more than 12 months ago, its “validity” expired, and such a contract is not recognized as “suspicious”. In this regard, the Professional Association of the Participants of Capital Markets and Derivatives has developed an algorithm by which the traders of securities are recommended to analyze the contracts for compliance with the criteria of “suspiciousness”. The analysis of the contract must be carried out as of the date of its conclusion.