Main Points in Activity
- Brokerage activity is carried out by a broker who is a professional securities market participant.
- Rights and duties of a broker and his client shall be stipulated in the agreement on brokerage services and in the instructions given to the broker by the client in accordance with this agreement.
- Mandatory requirements to the agreement on brokerage services shall be set by the National Commission.
- Brokers shall transfer the power of attorney for carrying out transactions only to brokers. The transfer is allowed if it is stipulated in the brokerage services agreement or in cases when a broker is forced to do so in order to protect the interests of his client with the notification of the latter.
- Transfer of power of attorney shall be carried out in compliance with legislation.
- The broker shall execute clients' instructions in good faith and on terms favorable for the client and in the order in which they were received, unless the agreement with the client or his instruction envisions otherwise.
- Security transactions executed by the broker upon the clients' instruction should be executed with priority over the dealer transactions of the broker, in case these two types of activity are combined, or over transactions executed by the broker upon instruction of its affiliated persons.
- In the event that the broker has an interest which prevents him from executing the client's instruction on the terms most beneficial for the client, the broker shall immediately notify the latter of such an interest.
- In the event that a conflict of interests between the broker and his client, of which the client was not notified before the broker received the respective instruction, led to execution of the instruction to the detriment of the client's interests, the broker is obliged to compensate for the losses from his own account as set forth in civil legislation.
- The broker shall compensate in full for the losses incurred by a client as a result of non-execution or improper execution by the broker of his obligations under the agreement on brokerage services.
- In the event that the broker is deemed insolvent (bankrupt), the property that he holds under agreements on brokerage services and which belongs to his clients shall not be included in tender stock.
Read more about this topic: Investment Broker
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