Bank of Russia sets limit on CFA purchases by non-qualified investors

The Bank of Russia has issued several directives concerning the regulation of digital financial assets. One of them, effective from 1 January 2021, sets a limit on the purchase of CFAs by individuals who are not qualified investors at 600,000 rubles in a 12-month period.

The limit does not apply to non-qualified investor-legal entities.

“Non-qualified investors may acquire CFAs with the ability to exercise rights in securities included in exchange quotation lists, Federal Loan Bonds (OFZ) or corporate bonds with adequate credit ratings. They may also buy assets that include monetary claims, the value of which is equivalent to the value of the precious metals specified in the CFA issue,” the directive states.

They may not acquire CFAs issued in foreign information systems, with the ability to exercise rights in issued securities, and if the issuance decision for such assets does not specify the term of obligations.

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The Bank of Russia draft directive was first presented in October 2020.

As noted, the law ‘On Digital Financial Assets’ has been in force since 1 January 2021.

The draft law defines “digital financial assets” and “digital currencies.” CFAs are digital rights whose issuance, recording and circulation are possible only by entries in a distributed ledger information system.

To issue CFAs, information about the issuer, details of the information-system operator, the type and scope of rights conferred by the assets, issuance data and other information must be provided.

Digital currencies are defined as a set of electronic data that can be accepted as a means of payment, not a monetary unit of the Russian Federation or a foreign state, and also as an investment. Cryptocurrencies are therefore recognised as property.

The law does not explicitly prohibit the issuance and exchange of cryptocurrencies and does not introduce administrative or criminal liability for operations with them, as proposed earlier, but in practice it bans accepting cryptocurrency as payment for goods and services.

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