The Bank of Russia intends to ensure that illicit sale of financial products (misselling) becomes a marginal phenomenon for the market, said Sergey Shvetsov, First Deputy Governor of the Bank of Russia, during the International Financial Congress.
“The person understands that they bought the wrong bonds, trust management is not a deposit, yet the bank says: you signed the contract, all the information was in there. The negotiations themselves are not recorded, and the documents show that the person received full information on the risks. There is the American approach: if something is signed, then it is your problem. As the regulator and market actors, we should understand that, based on that thesis, we will not get customer loyalty. In fact, people do not read the contracts,” Shvetsov said.
According to him, it is possible to be engaged in either soft or rigid regulation of financial products sales. “To determine what you need to know about a person, when offering them a certain financial product, what words to accompany sales with,” he said.
“Now the practice is based primarily on the fact that no one is watching that, everybody does that. If we are not forgiving to the fact that everybody does that, if we take unfair participants out of the market, everyone would know that only fringe elements do that,” Shvetsov said.
In case of soft regulation, members of banking associations will voluntarily assume obligations to follow certain standards; if a choice is made in favor of a strict regulation, then a law that sets responsibility for illicit sale will be passed.
One of the proposals to combat unscrupulous sales is annulling all the seller’s KPI in case they sold a financial product with violations.