The Bank of Russia has identified violations in the work of brokers in compliance with the requirements to prevent conflicts of interest in IPOs. As it turned out, the electronic accounting database does not contain all information about such cases. This is stated in the regulator’s letter published on the NAUFOR website.
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As an example, the Central Bank cited a situation in which brokers simultaneously provide services to the issuer and clients. However, they do not consider this a conflict of interest and do not take any action to correct the situation.
In one of the cases cited in the letter, the broker did not allow clients to set their own IPO participation price, but instead set it at the upper end of the price range;
The Central Bank also reported on an episode in which a broker, during an initial public offering, simultaneously provided subscription services and brokerage services to its clients.
The regulator also reminded that brokers must avoid conflicts of interest to reduce the risk of client loss. By law, they must inform clients of conflicts of interest and keep records of this information electronically.
Author:
Karina Pardaeva
Source: RB
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