Center of the question: Moscow Exchange allowed to buy currency at the dollar

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From April 26, the Moscow Exchange will give investors the opportunity to make transactions with major world currencies in the amount of one dollar or one euro cent. According to Andrey Skabelin, Director of the Foreign Exchange Market Department of the Moscow Exchange, this decision is associated with a massive influx of private investors to the exchange, who actively use brokerage accounts for currency conversion, including for everyday purposes. According to industry experts, such innovations will really help simplify the life of many investors, however, the opportunity to make such transactions existed before. Details – in the material “Izvestia”.

Soon innovations

From April 26, the Moscow Exchange will give investors the opportunity to make small transactions with major world currencies: the minimum amount in dollars will be reduced from $ 1,000 to $ 1, and in euros – from € 1,000 to 1 euro cent, Mosbirzh reported. Andrei Skabelin, Director of the Foreign Exchange Market Department of the Moscow Exchange, explained this decision by the fact that recently there has been a massive influx of private investors into the exchange, who actively use brokerage accounts for currency conversion, including for everyday purposes.

According to him, transactions in the amount of one dollar or more will expand the possibilities of individuals, including in operations with foreign securities in terms of coupon payments and receipt of dividends, as well as conversion within the framework of IIA (individual investment accounts).

– Small lots will complement the line of trading modes in the foreign exchange market, now for each category of client we will have a full range of services and products, from large-block trading for banks, corporations and brokers to transactions in small lots for private investors, says Skabelin.

Currently, the minimum lot in the foreign exchange market is $ 1000 or € 1000. Participants have access to operations with 17 currency pairs. Trades are held from 7:00 to 23:50 Moscow time.

It was possible before

In principle, it was possible to make such transactions for a long time, but earlier this opportunity was provided only by some brokers at the expense of their own infrastructure, economic observer Vyacheslav Abramov told Izvestia.

A number of brokers have long made fractional lots and, in principle, allowed changing the currency not only in lots of $ 1000, but also for $ 100 and $ 1. First of all, it was for the convenience of legal entities engaged in foreign economic activity. For their convenience, it was decided that it was possible to change the currency in smaller amounts, since sometimes they have contracts that are not integral, but, say, $ 1354. And in order to receive such an amount, investors had to change virtually $ 2000. They deduced what they needed for the deal, and the rest had to be kept.

Individuals, of course, also experienced inconveniences, continues Abramov. “When people came to change their currency, it was also not very convenient for them, because they could change at least $ 1000, and this, accordingly, every year a completely different amount in rubles. And, of course, not everyone has such an opportunity. Therefore, brokers began to provide such services to individuals, ”the specialist notes.

Advantage for attracting investors

The innovation of the Moscow Exchange is largely aimed at attracting new investors, since now all clients of any brokers will be able to receive such a service, says Vyacheslav Abramov. “Now the list of securities in foreign currency has begun to expand, and American shares have begun to be added. And before, it turned out that investors could not change less than $ 1000. For example, now a person does not have the opportunity to invest large sums at once – it is for such investors that an additional advantage has appeared. They can conditionally bring in 10-20 thousand rubles, change them into dollars or euros and start buying some foreign instruments, the same Eurobonds, the list of which has expanded. Accordingly, this is also an additional advantage in order to attract more and more new investors.“, – he explained.

The new rules will allow selling any volume of currencies at the exchange rate, explains Dmitry Golubovsky, an analyst at the Kalita-Finance financial group. However, according to him, it is useful not so much for small investors as for investors in general.

For example, I bought shares of American companies, they are quoted in dollars. I earned some dollars and received dividends in them. I have fractional amounts in my account, and I can only sell large ones according to the exchange rules. Let’s say I have accumulated $ 2700 with kopecks there. I can sell $ 2000, but I can’t do anything with $ 700. For example, if my broker does not allow me to change fractional amounts, I need to withdraw them to a bank account and change there at the rate of the bank and overpay to the bank, or I need to change them under special conditions with the broker. Now I do not need to do this and it will be convenient for me. So the exchange here simply meets clients and general development trends.

Beginners in business

In general, a growing number of new investors was previously announced at the Moscow Exchange. In March 2021, 754.5 thousand new investors came to the exchange, and the total number of private traders with a brokerage account reached 11 million. In the same month, more than 1.8 million people made transactions, compared with 606.7 thousand in March last year. Moscow (416.7 thousand), Moscow Region (230.2 thousand) and St. Petersburg (177.6 thousand) became the leading regions in terms of the number of open IMS. From the rest of the regions, the top includes the Sverdlovsk Region (127.8 thousand accounts), the Republic of Bashkortostan (125 thousand) and the Krasnodar Territory (112 thousand).

The Central Bank is looking at the growth in the number of newly minted investors not so rosy. So, in December 2020, the head of the regulator Elvira Nabiullina said that financial organizations “sell” to citizens “products that are not suitable for unqualified investors”, offering to shift deposits into them. And on December 15, Nabiullina wrote a letter to market participants, in which she recommended not to sell complex investment products, in particular bonds, the income on which depends on various factors, for example, the price of an asset. The recommendation, which began to be implemented by banks and brokers, extends until April 1, 2022, when testing for knowledge of the risks of financial products should begin for retail investors.

At the same time, the Central Bank decided to develop a bill that will postpone the start date of testing to October 1, 2021 and limit the sale of complex products to inexperienced investors. The bill assumes that simple instruments (for example, stocks) will be available to investors by default until October 1, 2021, more complex ones (for example, margin trading) – from that date, but subject to testing. With regard to structured products, the Central Bank chose a tougher position. Thus, it will not be possible for an unqualified investor to buy a complex structured product until at least April 1, 2022, with the exception of a few instruments.