OREANDA-NEWS. January 13, 2010. On January 1, 2010 changes to the articles of the Tax Code that cover taxation of individual investors’ securities trades and derivatives trades (futures and option contracts) came into effect.

A major improvement is that at the end of a tax period, taxpayers are now allowed  to set off their profits and losses realized from securities trades executed on the cash equities market against profits and losses from futures and options underlied by securities and indices.

These changes enable individual investors to carry out more effective arbitrage operations, for example, between stocks trading on RTS Standard and futures and options on FORTS. Trading on RTS Stock Exchange from a consolidated cash position also reduces funding costs, thus making arbitrage more attractive.

Using various combinations of stocks, bonds, futures and options allows for generating additional returns on investments as well as for hedging the portfolio.

The latest improvements to the Tax Code bring about better trading strategies and widen the opportunities for individual investors to diversify their portfolios by adding all kinds of exchange products.

On January 1, 2010 the federal law "On amending Part I and Part II of the Tax Code and certain legislative acts of the Russian Federation" came into force.

This federal law was developed by the Federal Financial Markets Service together with the Ministry of Finance of Russia. It is aimed at improving legal regulation of taxation of derivatives trading and creating a taxation scheme for such operations that would be consistent with similar schemes employed in economies with developed financial systems.