More than nine million of non-qualified investors that are clients of major brokers passed a test before purchasing complex financial instruments over the two years after the procedure was launched. A third of the investors (33.32%) passed the test successfully.
Over the specified period, the number of non-qualified investors increased by almost 78% (from 19.7 million to 35 million), however the share of participants in the testing dropped (from 23.7% to 9.17%). In addition, the test results in the second year were on average better than in the first year. This evidences that non-qualified investors applied a more conscious approach to selecting financial instruments and getting ready for the testing.
The majority of investors pass the test for understanding the specifics of and risks inherent in Russian issuers’ shares that are not on quotation lists. Other topics include unsecured transactions and Russian unrated bonds, in which non-qualified investors took an interest in the second year of the testing. Previously, non-qualified investors were more interested in foreign shares that were not on quotation lists. The most popular topics turned out to be the most complicated ones — the participants in the testing made the largest number of mistakes there. A shift in the interest from foreign to Russian securities may be grounded in sanctions risks and restrictions imposed on the purchasing of a number of instruments.
Around a half of the investors passed the test at the first attempt, almost a quarter (23%) passed the test at the fourth attempt. However, the share of those who passed the test at the first attempt was gradually decreasing as the number of questions in the test was growing. The share of those passing the test at the fourth, etc. attempt decreased, which may evidence giving up the practice of passing the test by using the brute force method.
According to the results of the behavioural assessment, the testing improves the awareness of investors and makes them more prudent when concluding transactions, evaluates their knowledge of financial instruments, warns against purchasing risky products and instruments which investors do not understand and which may entail uncontrolled losses.
Preview photo: Andrii Yalanskyi / Shutterstock / Fotodom
