On 19 June 2019, the State Duma of the Russian Federation adopted in the first reading a set of bills aimed at creating and operating electronic platforms (marketplaces) for the provision of banking and insurance services, services in the securities market and other financial services.
The regulation of such marketplaces is provided for mainly by a draft federal law “On concluding transactions using an electronic platform”* (the “Bill”), which determines the procedure for concluding transactions on an electronic platform between financial institutions and consumers, and by a complementary bill* that contains corresponding amendments into applicable federal laws.
The authors of the Bill define an electronic platform as an information system allowing the remote interaction of financial service providers with consumers to enter into transactions. Such transactions include transactions aimed at providing banking services, insurance services, services in the securities market, transactions with financial instruments, property trust management agreements, as well as transactions aimed at providing other services of a financial nature.
Settlements on transactions that have been concluded on an electronic platform will be carried out using a special account of the platform’s operator or, if the platform’s rules allow, by using the fast payment service of the Bank of Russia.
Consumers will access the marketplace through a unified identification and authentication system, and users will be identified through a unified biometric system.
The Bill determines the legal framework for the activities of operators of electronic platforms. A marketplace operator is defined as a legal entity entered in a special register maintained by the Bank of Russia, which provides participants with access to an electronic platform, but is not a party to a financial transaction. At the same time, the operator of a marketplace cannot be an entity that combines its activities with the activities of a credit institution, a non-credit financial institution, except for the activities of a trade organiser, a depositary, a specialised depositary or a registrar.
Each operator will approve its own rules for operating its platform, and such rules will be registered with the Bank of Russia. The rules will stipulate, among other things:
- the requirements for the platform’s participants;
- the procedure for placing information and the amount of information that needs to be posted on proposed financial products; and
- the procedure for entering into transactions (including the procedure for the exchange of electronic documents between participants).
The Bill also provides for the creation of a unified register of financial transactions in which will be kept information on the obligations of a financial institution towards a consumer under bank account (deposit) agreements concluded on an electronic platform.
This new mechanism of digital interaction with consumers will affect the activities of banks, insurance companies, data aggregators and other suppliers of financial products by providing them with an opportunity to enter new consumer markets rapidly and reduce the costs associated with the classic method of office interaction.
Furthermore, the creation of “financial supermarkets” will ensure consumers instant online access to a wide range of financial products and create prerequisites for increasing competition in the market.
The current versions of the bills are first versions and may be subject to change. CMS Russia will follow the bill review process and report on further changes.
If you have any questions on this eAlert, do not hesitate to contact CMS Russia experts Anton Bankovskiy and Anastasia Entyakova or your regular contact at CMS Russia.