DERIVATIVES REGULATION IN RUSSIA
By Alexander Nadmitov, Managing Partner at Nadmitov, Ivanov & Partners Law Firm; Expert at HSE—Skolkovo Institute for Law and Development (Moscow, Russia), LL.M. (Harvard), M.Juris (Oxon), M.A., B.A. (PFUR).
and Delgira Khodzhaeva, Associate, Nadmitov, Ivanov & Partners Law Firm, Moscow, Russia
FINANCIAL DERIVATIVE INSTRUMENTS
The definition of derivative financial instruments (hereinafter referred to as “derivatives”) is contained in Article 2 of the Federal Law of April 22, 1996 N 39-FZ “On the Securities Market”. A list of types of derivatives is contained in the Ordinance of Bank of Russia N 3565-U of February 16, 2015, “On Types of Derivative Financial Instruments”.
Article 2 defines a derivative as a contract, with the exception of a repo contract, providing for one or more of the following obligations:
· pay sums of money depending on changing market conditions;
· buy/sell the underlying asset or enter into a derivative financial instrument;
· transfer the underlying asset into the ownership of the other party not earlier than the third day after the day of conclusion of the contract, the obligation of the other party to accept and pay for the specified property.
According to the Section 2, Art. 44 of the Law on the Securities Market, the Bank of Russia has the right to qualify derivatives and determine their types, however, this right does not extend to the possibility of derogating from the definition of the derivatives contained in the Law on the Securities Market.
Key legislation that regulates derivative instruments includes:
· the Federal Law on the Securities Markets; and
· the Federal Law on Clearing and Clearing Activity
The Central Bank of Russia issues regulations and orders in relation to derivative instruments. Some acts adopted by the Federal Service of Financial Markets remain in effect.
Also, the Civil Code is of relevance in terms of some matters connected with the enforcement of derivatives.
Before 2007 parties to derivative contracts have found it impossible to enforce rights in the Russian courts.
In 2007 amendments to the Civil Code were adopted which granted judicial protection to derivative transactions according to which a party is obliged to make a payment dependent on:
· interest rates;
· inflation rates;
· a change of price in goods or securities;
· the exchange rate of specific currencies; or
· the occurrence of other uncertain events contemplated by law.
Derivative instruments are enforceable in court if:
· at least one party is a legal entity with a valid banking license or a license of a professional securities market participant; or
· at least one party to a transaction concluded on a stock exchange is a legal entity that holds a license permitting it to conduct trades on exchanges.
In June 2007 a tender committee was formed, and in August 2007 a tender was announced for the development of Russian standard documentation for short-term transactions in the domestic over-the-counter market. The source of Russian standards is documentation developed on the basis of the Anglo-Saxon system of law by the International Association of Swaps and Derivatives (ISDA): these standards are based on the ISDA Master Agreement in the 2002 edition, taking into account the 1992 edition. Standard documentation was developed in accordance with Article 427 of the Civil Code (Approximate terms of the contract. The ISDA Credit Support Annex was adopted as the base of the Russian provisional standard documentation. There are two editions of RISDA: 2009 and 2011. There is a model supplementary agreement to the 2009 general agreement on the transition to the new edition.
· Master agreement (establishes the basic rights and obligations of the parties, the conditions of early termination of transactions);
· Schedule (contains special conditions that go in addition to the Master agreement. For example, additional grounds for termination of transactions, documents to be provided, etc.);
· Confirmation (contains the terms of specific transactions);
· Relevant ISDA Definitions (technical terms, terms of definitions for different types of derivatives);
· Collateral CSA (terms of provision of financial security depending on revaluation of transactions).
RISDA has the similar structure:
· Master agreement
· General Agreement (Schedule)
· Standard terms (Relevant ISDA Definitions).
In the master agreement there is a reference to exemplary conditions that define the list of transactions, the procedure for entering/changing/terminating transactions, basic statements and assurances of the parties, the responsibility of the parties, the grounds and mechanisms for early termination.
The part of the general agreement which is agreed by parties contains the settlement procedure, the list of contracts, additional assurances and the list of related parties. It also defines cross-default thresholds.
At the level of the general agreement, additional conditions for early termination may be provided:
· the fall of rating;
· change of owner;
· material adverse change, unforeseen changes in the financial position of the counterparty, unexpected and serious losses as a result of market changes, etc.
Standard terms determine:
· typical parameters of transactions, fixation of market prices;
· ways to determine rates and indexes;
· typical events impeding execution and alternatives;
· sample confirmation forms
Confirmation of transaction contains the economic conditions of a particular transaction, additional assurances of the parties, and details and instructions for calculations.
Paragraph 1 of Art. 15.5 of the Law on the Securities Market provides for the obligation to provide information on over-the-counter short-term transactions to the repository. If over-the-counter short-term transactions are concluded under the terms of the master agreement, the repository should also be provided with the information on the master agreement.
In accordance with paragraphs 2 and 3 of the instructions of the Bank of Russia of August 16, 2016 N 4104-U, legal entities with the status of:
- credit organization;
- management company;
- non-state pension fund;
- management company of investment funds, mutual funds and non-state pension funds;
- joint-stock investment fund;
- trade organizer;
- clearing organization;
- insurance organization.
Russian legal entities which do not have this status and are parties to over-the-counter short-term transactions are required to provide information to the repository about each of these contracts, if the second party to such a contract is a legal entity, if one of the following conditions is present:
- if the amount of obligations from such an agreement as of the date of conclusion in rubles or equivalent in foreign currency calculated at the official foreign currency exchange rate in relation to the ruble established by the Bank of Russia exceeds 1 billion rubles;
- if the amount of obligations from the totality of such contracts at the end of each of three consecutive months is at least 10 billion rubles. or equivalent in foreign currency calculated at the official foreign currency exchange rate in relation to the ruble established by the Bank of Russia on the date of calculation;
- if such contracts are concluded from the first day of the month following the settlement period, within which the threshold values were reached.
In accordance with part 4 of Art. 15.19 of the Administrative code of the Russian Federation there can arise administrative liability for a party to an over-the-counter short-term transaction violating the order and (or) deadlines for providing information on over-the-counter short-term transactions and (or) general agreement to the repository or providing incomplete and (or) false information.
The first edition of RISDA was not fully used due to the lack of legislative recognition of liquidation netting.
On August 11, 2011, changes in legislation came into force to eliminate this lack. In accordance with the relevant laws of February 7, 2011 No. 7-FL and No. 8-FL, a legal definition of liquidation netting was introduced, and laws on bankruptcy and on the securities market were supplemented by Articles 4.1 and 51.5, respectively, which govern the conditions for the validity of liquidation netting.
The new edition of RISDA was agreed with the Federal Financial Markets Service on December 28, 2011 - simultaneously with the adoption by the Service of Order N 11-68/pz-n regarding the procedure for the repository to maintain the registry of OTC derivatives. If the party of the short-term transaction is a foreign person, then for the purposes of netting, according to the Order, the documentation of ISDA can be used.
In RISDA 2011 the provision of the law on the need for parties to provide information on transactions concluded to the repository is duplicated.
Russian legislation does not explicitly recognize means of security based on title transfer arrangements, including the corresponding ISDA Credit Support Annex 1995.
In an attempt to avoid this limitation, when drafting the variation margin agreement in RISDA 2009, the developers relied on the analogy with marginal contributions in exchange trading, which had support in judicial practice. However, this way of solving the problem was initially characterized as not very successful and the agreement on the variation margin was not widely used in practice.
In RISDA 2011, the margin agreement was adjusted mainly to fit it into the definition of derivative financial instrument. In turn, this would allow both to protect the agreement from the risk of re-qualification, and to include margin contributions in liquidation netting.
In the Russian legislation there are no rules that establish mandatory margin requirements for OTC derivatives transactions. In accordance with paragraph 1 of Art. 51.5 of the Law on the Securities Market, an agreement may be concluded on the conditions determined by the general agreement, providing for the obligation of one of the parties to the agreement to transfer to the other party securities and (or) money, including foreign currency, in order to ensure the fulfillment of obligations from contracts concluded on the terms of the general agreement.
In April 2017, on the basis of a joint document of the Basel Committee on Banking Supervision and the International Organization of Securities Commissions “Margin requirements for non-centrally cleared derivatives”, the Bank of Russia prepared a report for public consultation “On the phased introduction of compulsory margining of the non-centrally cleared OTC derivatives.”
The Bank of Russia proposes to establish mandatory margining requirements for all OTC transactions that are concluded without the participation of the central counterparty with the exception of delivery forwards, swaps, options. The Report also notes that the requirements for obligatory margining of OTC derivatives transactions will apply to all participants in the OTC derivatives market if the nominal value of such a transaction at the end of each of three consecutive months reaches the threshold set by the Bank of Russia.
Moreover, with the introduction of the provisions on a security payment (Article 381.1 and 381.2) from June 1, 2016, the legal practitioners raised the question of the relationship between the Standard Conditions and the provisions of the Civil Code on the security payment. Most legal practitioners in the field of derivatives have strongly opposed the application of the norms of the security payment to security for derivative financial instruments. According to paragraph 1 of Art. 51.5 of the Law on the Securities Market, the general agreement may cover, inter alia, a security payment: “Under the conditions defined by the general agreement, an agreement may also be concluded stipulating the obligation of one of the parties to the agreement to transfer to the other party securities and (or) cash ... in order to secure the fulfillment of obligations from contracts concluded under the general agreement.”
This is due to the fact that the construction of the security payment has many flaws. According to the provisions of the Civil Code of the Russian Federation, only a monetary obligation can be secured by a security payment (including the obligation to pay damages or pay a penalty under the contract, as well as an obligation from forward transactions provided for by paragraph 2 of article 1062 of the Civil Code). This construction does not allow for the provision of obligations for the supply of the underlying asset, which may be provided for by the delivery derivatives under the general agreement. And although it could be argued that, by providing a mechanism for the early termination of all deliveries and settlement derivative transactions within the framework of a single general agreement, the result would be a single monetary net obligation that can be secured by a security payment. However, the courts may interpret the norms of the Civil Code of the Russian Federation differently - for example, by interpreting the reference in the Art. 381.1 to paragraph 2 of Art. 1062 as limiting the possibility of securing supply contracts in this way.
Also, according to art. 381.2 a security payment only applies to “depositing securities that are subject to transfer under a secured obligation”, although in the market, derivative transactions are sometimes secured through the transfer of liquid securities into the counterparty’s ownership that are not the object of any secured transaction.
The law states that in the event of the circumstances stipulated in the contract, “the amount of the security payment is set off against the performance of the corresponding obligation”. In the absence of a clear judicial interpretation of this provision, it can be understood as involving the use of set-off, and the use of the set-off mechanism can make it impossible to recognize and take into account the security payment in case of the counterparty’s bankruptcy.
This problem has already been addressed by the courts. For example, a long-standing dispute between LLC Sodbiznesbank (hereinafter referred to as Sodbiznesbank) and OJSC Alfa-Bank (hereinafter referred to as Alfa Bank) has become a landmark case. Banks have entered into a General Agreement on the general terms of conducting short-term transactions, which provided for a special procedure for termination of obligations, including their automatic termination due to revocation of a banking license from one of the parties.
By order of the Central Bank of the Russian Federation Sodbiznesbank’s license for banking operations had been revoked since May 13, 2004, and later, Sodbiznesbank was declared bankrupt. On May 13, 2004 Alfa-Bank ceased its obligations, as a result of which Alfa-Bank has directly withdrawn about $7 million from the Sodbiznesbank’s deposit in Alfa-Bank in accordance with the terms of the General Agreement.
Arbitration courts discontinued the cases on the return of the amount written off by Alfa-Bank from the deposit to Sodbiznesbank's bankruptcy estate with reference to Art. 1062 of the Civil Code of the Russian Federation on betting deals that are not subject to judicial protection. Then, in case No. A40-42818/06-47-273 Sodbiznesbank’s bankruptcy trustee began to challenge Alfa Bank’s $7 million offset as an independent transaction, arguing that the obligations of the parties under the General Agreement had ceased to be in result of the offset. However, the court decided that the actions of the parties on the termination of obligations were not an offset transaction in the sense of Art. 410 of the Civil Code of the Russian Federation, but were “other, not stipulated by the Civil Code of the Russian Federation, basis for termination of obligations, which, by virtue of paragraph 1, Art. 407 of the Civil Code of the Russian Federation parties have the right to provide in the contract". The problem raised in this court case has not yet found a definite solution. The courts had to determine whether the withdrawal of funds from the deposit was offset against the Bankruptcy Law, or whether it was liquidation netting - a special procedure for termination of obligations in the financial market.
On September 17, 2013 the Presidium of the Supreme Arbitration Court discussed the draft of the information letter “On certain issues of resolution of disputes arising out of interest swap contracts”. The project was published, but it was not made effective. The Supreme Arbitration Court of the Russian Federation did not solve the problem of the relationship between liquidation netting and general bankruptcy rules. The main advantage of liquidation netting is the possibility of the backdating of an obligation, which creates a fiction in which the termination of obligations occurs before the start of the prohibitions that lead to the termination of obligations. However, the Supreme Arbitration Court of the Russian Federation proposed a conservative approach, according to which the agreement can be terminated only after the debtor and the amount of the debt are determined.
Currently, there is no statutory obligation for participants in the over-the-counter short-term market to enter into forward transactions using centralized clearing. At the same time, the law provides for opportunities for concluding new over-the-counter short-term transactions involving the central counterparty, as well as for transferring existing contracts that are derivative financial instruments to centralized clearing.
Since January 1, 2012, the Federal Law of February 7, 2011 N 7-FZ “On Clearing, Clearing Activities and the Central Counterparty” (previously called “On Clearing and Clearing Activities”) has been in force. Federal Law No. 403-FZ of December 29, 2015 “On Amendments to Certain Legislative Acts of the Russian Federation” was adopted to unify the status of the central counterparty.
The Bank of Russia, in accordance with the instruction of the Bank of Russia N 3341-U of 25 July 2014 “On Recognizing Infrastructure Organizations of the Financial Market as Systemically Important” Bank National Clearing Center (Joint-Stock Company) (hereinafter - NCC Bank (JSC)) is recognized as a systemically important central counterparty. Currently, there are three central counterparties: Bank National Clearing Center, PJSC Clearing Center MFB and the Settlement Depository Company.
In paragraph 17 of Art. 2 of the Law on Clearing, the definition of a central counterparty is set forth as follows: a central counterparty is a legal entity that is one of the parties to contracts concluded, the obligations of which are to be included in the clearing pool, has a license of a non-bank credit organization for banking operations activities and is assigned the status of a central counterparty.
Bank NCC (JSC) performs central clearing of the following over-the-counter forward transactions:
- currency swaps;
- interest swaps;
- currency forwards;
- currency-interest swaps.
The Bank of Russia published the Final Report "On the Phased Introduction of Requirements for Mandatory Centralized Clearing in respect of Standardized OTC derivatives" (hereinafter referred to as the Final Report). It is planned that the Bank of Russia will establish a list of over-the-counter short-term transactions subject to central clearing.
In determining the types of OTC derivatives transactions subject to centralized clearing, the Bank of Russia adopted the criteria contained in the report of the Financial Stability Board “Implementation of OTC Derivatives Market Reforms”, namely the presence of a central counterparty clearing in this category of OTC derivatives, as well as the ability of the central counterparty to process the expected volume of transactions and manage the risks arising from clearing in the relevant category of the OTC short-term transactions.
It is planned that over-the-counter short-term transactions which are intragroup derivatives will not be subject to centralized clearing due to the fact that risks arise within one group and can be settled.
OTC derivatives are also not subject to centralized clearing if the Bank of Russia, the Russian Federation, constituent entities of the Russian Federation, and municipal entities are party to such an agreement.
It is also planned to introduce administrative responsibility for non-fulfillment of requirements for centralized clearing.
INTEREST RATE SWAPS
The Hermitage Development v. UniCredit Bank and Agroterminal vs UniCredit Bank cases had a great influence on the development of court practice on interest rate swaps. In the autumn of 2013, on the basis of these cases, the draft of the Information Letter of the Supreme Arbitration Court of the Russian Federation “On certain issues of dispute resolution in relation to interest rate swap contracts” was drawn up. The main ideas of the project still determine the position of the courts, namely:
· The legislation of the Russian Federation allows for the conclusion of contracts recognized as derivative financial instruments, and obligations for derivative financial instruments exist continuously, and not only at the date of payment;
· standard documentation may be used;
· the obligation of the professional side to disclose information was introduced;
· the right of the party to terminate the contract if changes that do not coincide with the main purpose of the contract take place.
In 2016, one of the most significant cases was considered by courts, determining the status of a bank - a party to a swap transaction - the case of Platinum Real Estate against the Bank of Moscow. In September 2015, Platinum Real Estate LLC appealed to the Moscow Arbitration Court with a claim against the Bank of Moscow JSC to invalidate the General Agreement on time bargains in the financial markets and evidence for currency swap transactions, dated March 21, 2013, concluded with the Bank. In January 2013, between the Company and Bank, a Credit Line Agreement was concluded with a debt limit of 410 million rubles and a floating interest rate. The provisions of the Loan Agreement provided that the Company was obliged within 30 days to conclude with the Bank a general agreement on time bargains in financial markets for the entire duration of the Loan Agreement, after which the lending limits under the Loan Agreement were to increase. In May 2013, within the framework of the general agreement on term transactions between the Bank and the Company, two contracts of currency interest rate swap were concluded - the Swap agreements. The objectives of the Swap agreements were to record the risks of adverse changes in exchange rates arising for the Company under the Loan Agreement, as well as the risk of a possible change in the interest rate. Subsequently, a significant devaluation of the ruble exchange rate made servicing the Company's obligations under swap contracts too costly for the Claimant. In September 2015, the Company went to court with a claim to invalidate swap contracts.
The court analyzed the circumstances of the case and made the following conclusions in favor of the Claimant:
- The fact that the Claimant has the necessary specialists/experience, as well as the use of narrowly specialized terms in correspondence with the Bank does not mean that the party using them in the correspondence is fully aware of the content of the terms and the consequences of the transaction;
- Excessive use of the reference norms and terms in the text makes it difficult to understand and use them under normal conditions.;
- The Bank, as a qualified investor, being a professional participant in the securities market, is obliged:
· not to take advantage of financial illiteracy of non-professional investors (within the meaning of paragraph 2 article 1062 of the Civil Code of the Russian Federation);
· based on the principle of good faith, the Bank is obliged to make the necessary and sufficient efforts to ensure that the provisions of complex financial instruments (in this case, swap contracts) are clear, unambiguous and understandable to anyone who does not have special skills in finance and who is not familiar with the terminology and customs used in this field;
· to disclose information most fully to the counterparty: provide information concerning the economic and legal substance, explain all financial risks, possible consequences of using the instrument (swap contracts), including the consequences of various options for changing the underlying asset index, in particular - about the worst-case scenario development of events.
- There was a special trust relationship between the Company and the Bank, in which the Bank acted not only as a lender, but also as a financial consultant for the Company.
- The absence of any objections and requests for clarification does not constitute an agreement with the information provided or with its full and adequate understanding.
- Interest in a disputed transaction does not indicate a proper understanding by the Company of the nature of the transactions and the risks associated with them.
- The provision by the Bank of only information and forecasts indicating the potential benefit for the Company could have created false ideas for the Claimant, as a non-professional investor, about the potential risk of concluding swap contracts.
The swap contracts were recognized by the court as speculative, and not hedging the Claimant’s risks, since they did not eliminate the interest rate risk of the Company. The court came to the conclusion that the Bank acted in bad faith both in the process of concluding swap contracts and in subsequent contractual relations with the Claimant, which misled the Company as to the merits of the concluded transactions and the negative risks associated with them.
As a result of the adoption of this court decision, the Bank of Russia made a proposal regarding the possibility of introducing the qualifications of corporate clients by analogy with the qualifications of individuals, including by the criterion of their financial literacy to protect the rights and interests of bona fide professional participants.
The issue of the duties of a professional party to a derivative transaction was further considered in one of the most landmark cases in 2017 – Transneft vs. Sberbank. The background of case is as follows:
On December 27, 2013 Transneft and Sberbank entered into two FX options under which Sberbank sold to Transneft an FX put option to sell to Sberbank around USD 2 billion for receipt of RUB 65 billion (“Put Option”) in consideration for receipt of a premium of around RUB 169 million; and Transneft sold an FX call option to Sberbank to sell to Transneft RUB 65 billion for receipt of around USD 2 billion (“Call Option”) in consideration for receipt of a premium of around RUB 1.3 billion. However, in January 2017, Transneft filed a claim to render the Options invalid, arguing that Sberbank did not act in good faith and, as a result, the Options should be considered null and void.
The court has established that the Call Option could have been beneficial for Transneft only if RUB did not undergo significant depreciation against USD. Although, FX risk has risen in Russian markets for the last 25 years and Sberbank mentioned this risk in its presentations to Transneft, the Court suggested that Sberbank should have taken into account a wider range of factors when making forecasts. Accordingly, the Court imposed a “fiduciary” duty on Sberbank. It stated that Transneft did not have any reason to doubt the information provided by Sberbank prior to entering into the derivative transactions as Transneft claimed that as a result of “long term fiduciary relationships, Transneft viewed Sberbank more as its trusted advisor, rather than an independent counterparty to a contract. Transneft also stated that the Russian market standard documentation is inherently complex and difficult to understand for a non-professional and none of the marketing materials provided by Sberbank contained references to clauses of the market standard documentation that would apply to the Options. The Court examined the pre-trade conduct of the parties and presentations which Sberbank gave to Transneft from January to December 2013 and came to these conclusions: (i) Sberbank gave a misstatement in relation to the probability of depreciation of the Ruble and risks associated with it; (ii) Sberbank received “excessive profits” in result of exercising the Call Option.
GOOD FAITH & FIDUCIARY DUTY
The content of the principle of good faith and the criteria for its assessment differ with respect to participants in the derivatives market, depending on who the transaction is made with:
· the transaction is concluded by a professional financial market participant with the client in the framework of the relations of representation, in which the standard is the presence of fiduciary relations with the client, as well as responsibility for transactions made at the expense of the client, for example, in brokerage activities under the brokerage;
· the transaction is concluded with the counterparty, and there is no relationship of representation, and both parties act as equal participants.
In the second case, both parties have the same rights and obligations, including the observance of the principle of good faith. However, it is necessary to take into account that the courts impose a fiduciary duty on professional participants in financial markets, even if they do not act within licensed brokering activities, and both parties act in a transaction independently and at their own expense.
So, what does the court qualify as the behavior not in good faith on the part of the party to derivative transaction? Considering the claim of Platinum Real Estate LLC against Bank of Moscow JSC on the invalidity of the interest-currency swap transaction (decision of February 26, 2016 in case No А40-168599/15-98-1397), the Arbitration Court established the following facts:
· currency-interest swap is a complicated instrument, and it is impossible to understand the exact content of the contract from the presented materials, while these materials were a proposal to conclude a deal;
· such transactions have not previously been concluded by the plaintiff;
· in the process of correspondence, the bank did not disclose the nature and consequences of the transaction, i.e. plaintiff’s obligations arising from it, even in accordance with the exchange rate forecast applied by the bank itself;
· the bank understood the inexpediency of the transaction for the plaintiff;
· at the time of the conclusion of the contract, the bank applied an interest rate that was different from the market, as a result of which even then the swap had a negative value.
The aggregate of these facts was qualified by the court as an absence of good faith entailing the invalidity of the swap agreement.
The lack of a clear legal regulation of the amount of information to be disclosed by a professional participant in the financial market gives a wide margin of discretion to the court in relation to establishing the limits of such disclosure.
For example, in court decisions there were requirements to clarify the pricing of swaps and the procedure for calculating margin amounts, describe the procedure for determining the current value of swaps, disclose banks’ methods of calculating payments, provide forms or tables with calculations for each requirement for depositing floating (margin) amounts, etc.
The issue of fiduciary duty has often arisen during court hearings connected with derivative financial instruments. It is due to the fact that a non-professional counterparty usually expects a professional counterparty to participate more actively in the assessment of the need for financial solutions to hedge business risks. There were also cases when relations between counterparties of the DFI transactions were accompanied by consulting services provided by the professional party of the transaction and therefore regarded as containing elements of fiduciary relations. Non-professional parties fully rely on the professional parties in terms of the choice of financial instrument. In some cases, the professional party provides advice and assistance without disclaimers or without recommending to the counterparty to obtain an independent assessment as well.
At the same time according to the current legislation of the Russian Federation, it can be concluded that the DFI transactions do not create fiduciary obligations for the parties. Such transactions are entered into by each of the parties on its own behalf and at its own expense, so each of the parties has the freedom of choice and benefit as in other commercial transactions. It is also important that termination of DFI transactions may occur on the basis of certain standard documentation and general agreement and in some cases on the terms of payment of the amount of net obligation (none of the parties has the right to withdraw from the transaction at its own discretion, which also does not fit into the logic of fiduciary relations).
Nevertheless, there have been cases where the court applies fiduciary duties to the professional party of the derivative transactions if such transactions provide “special” services in the interest of the counterparty, such as informing the client about the risks of a financial instrument.
At the same time in other cases where a professional broker has fiduciary duties before the clients by virtue of the obligation, the court can come to exactly the opposite conclusions.
 Decision of the Supreme Arbitration Court of the Russian Federation of November 23, 2012 No. VAS-15181/12
 Decision of the Supreme Arbitration Court of the Russian Federation of 27 March 2013 No. VAS-3788/13
 Case А40-162646/2015
 Report of the Central Bank of the Russian Federation “Improving the system of investor protection in the financial market by introducing regulation of investor categories and determining their investment profile”, June 2016, Bank of Russia website, http://cbr.ru/analytics/ppc/report_30062016.pdf
 Case No. A40-3903/17-55-23
 Resolution of the Ninth Arbitration Court of Appeal of June 15, 2016 No. A40-205731/2015.
 Appeal resolution of the Judicial Devision on Civil Cases of the Moscow City Court of September 2, 2016 No. 33-34247.