The Central Bank of Russia recently released a regulatory document announcing the decision to introduce a capital adequacy ratio (CAR) for professional players in the CB market. This announcement primarily concerned dealers and brokers. After the release of the instruction the representatives of the Forex Dealers Association held a meeting to discuss the issues related to the obligatory norm of the professional participants of the market.
We remind you that the changes will be in force from 01.10.2021. The members of the AFD self-regulatory organization noted the possibility of a step-by-step introduction of the normative. So, from the date of the instruction till 01.04.2022 its value will be at 4%. After that date this figure will increase to 6%. By 10/01/2022, the rate is expected to increase to 8%.
“The NDC is aimed at provision of a reliable level of capital of a professional participant through formation of a pool of assets with low risks for continuation of activities”, – representatives of the Bank of Russia stated in an explanatory note.
A professional market participant must calculate the NDC on the last calendar day of each month. Herewith, the norm must not go below the set minimum. This requirement will be in force all the time. The Central Bank explains that in the case of the risks realization the NDC will allow the Forex dealer to cover all financial costs by itself.