Russian Central Bank has approved the Draft of the ‘Principal Directions of the Financial Market Development in Russia for 2016-2018’: innovations, competition and XS2A are among the main topics
Russian Central Bank has approved the Draft of the ‘Principal Directions of the Financial Market Development in Russia for 2016-2018’. The text is forwarded to the President and the Government for review and subsequent approval. It will also require the approval of the Parliament.
According to the Russian Law, ‘Principal Directions…’ are prepared every three years. The goal of the document is to set strategic benchmarks for the development of the market and foresee potential risks. However, more importantly, ‘Principal Directions…’ allows Central Bank to share its vision of the future with the major stakeholders. This is why the document will affect the regulator’s every decision and regulatory action in the near-term.
This time, ‘Principal Directions…’ are focused on the customer protection and transparency of the market. Considering its international obligations, Russian Central Bank will encourage higher financial inclusion levels – not only for individuals but for the companies as well (e.g. in terms of availability of loans).
In our opinion, the following aspects of the ‘Principal Directions…’ are of the most importance:
The proposed formula reflects the idea of XS2A implemented in the Second Payment Directive. It implies that third parties may get access to the client’s accounts/instruments/information at another financial institution without necessarily having a contract with that financial institution. Some European countries are already pondering the idea of the open transparent protocols for the exchange of information for this purpose. The most relevant example is the UK Open Banking Project.
If ‘Principal Directions...’ are approved without significant changes and then implemented, Russia will become one of the first jurisdictions with legally binding principle of open, transparent and nondiscriminatory access to client’s accounts/information. This will go beyond ‘classic’ direct debit schemes and ultimately lead to the creation of a single open standard for information exchange between the players in the financial market.
Russian Electronic Money is the major think tank in Russia promoting the idea of XS2A among the stakeholders.