National Association of Securities Market Participants NAUFOR. Its structure is highly diverse – there are managing companies, pension funds, and brokers. They are united by one thing – they are required to have a license from the state controller authorizing the activity in the stock markets of the country. The Association does not apply to state regulatory bodies of SRO (self-regulatory organization).

The history of the Association starts in 1994  – when 15 participants in the financial markets decided to agree among themselves on common standards of document management and collaboration. Then the Association had a similar name – PAUFOR. At the same time the first over-the-counter system was created, providing the conclusion of transactions with securities (which was later replaced by RTS (Russian trading system). The name of the NAUFOR, the association received in 1996, when there was the registration on the official national level.

Since the adoption in 1996 of the law “On securities market” in Russia, financial market regulation actually became two-level: the first level – public bodies (Central Bank, etc.), the second self-regulatory organization. In 1997, NAUFOR recognized the Federal Commission for the securities market, and today the organization includes more than 400 different companies, ranging from brokers and dealers, to banks.

Among self-regulatory organizations, the credibility of NAUFOR can be considered as the most high. The mission of the Association opened in 14 cities of Russia. Functions of the organization:

  • development of new standards and regulations, improvement of the existing system of regulation and functioning of the securities market;
  • control and functioning of and interactions between the members of the Association;
  • monitoring the work of the members of the Association, collection and analysis of the reporting in electronic form, certification;
  • participating in resolving disputes and conflicts between participants of the financial markets as a third independent party;
  • arrangement of seminars, conferences on financial topics. On the Association’s website you can find the “NAUFOR bulletin” and analytical surveys of stock markets;
  • consulting services for companies management and staff, assistance in drafting documentation for an individual participant of the financial market.

At the head of the Association stands Board that implements the main direction of development, selected once a year by the Board NAUFOR. The Board is elected twice a year.

The powers of NAUFOR allow the Association to carry out the certification of financial market specialists. Special respect deserves membership of NAUFOR as an affiliated participant in international organization IOSCO (the securities Commission with the headquarters in Spain).

A reasonable question is: why, when NAUFOR is having such a high status, the main powers on the foreign exchange market may go to CRFIN. If you look at the functions of both structures, they are very similar, only the focus of both organizations is exactly the opposite. The CRFIN has a highly specialized control directly over the participants and their activities in the foreign exchange market. NAUFOR has a more general specialization, covering all financial markets, ranging from securities and bonds to monetary markets. That is why any self-respecting broker will receive a license of NAUFOR, but would still prefer more specialized Association.

To obtain membership in the Association is not so simple. First, you need to have the appropriate license from the Central Bank. Contributions differ depending on the available license – initial fee depends on whether the potential participant of the Depository activity is engaged in broker and (or) dealer activities, manages the investment portfolio.

In our opinion, in addition to the prestige of membership in the Association, membership in NAUFOR would be useful for those who connect their work directly on the stock market of Russia. The Association is an active lobbyist of interests of participants of the exchange market at the legislative level, and has the court of Arbitration as a part of its structure, the composition of which is updated on the website every year (you can see representatives of banks, asset management companies, bar associations in the list).

There is an opinion among the brokers, that NAUFOR membership assumes no practical use, since cheaper to have a staff of its own lawyers, than to rely on the arbitral tribunal. And discounts for various trainings and seminars are not worth the cost – if there is a need for information, it is easier to pay one-time fee for it than to pay membership fees. However, this is just an opinion, and, as a minimum, membership in NAUFOR is an additional attractive bonus to the broker in the eyes of potential investors.

Official NAUFOR website:

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