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. Last Updated: 07/27/2016

Officials: Securities Need Self-Regulation

The state needs to create a legislative framework that will allow the private sector to regulate Russia's nascent securities markets, senior regulatory officials told a major conference of industry participants.


"We need breakthrough legislation supporting the idea of self-regulatory organizations," Dmitry Vasilyev, deputy chairman of the Federal Commission on Securities and Capital Markets, told a securities-industry conference Saturday.


He said one of the positive results of the two-day meeting was the widespread support expressed for self-regulatory organizations: associations of brokers and fund managers who decide the rules of the game themselves, arbitrating disputes and imposing penalties.


"You're the experts, you know better than we," Vasilyev told participants, some of whom had traveled from as far away as the Far East for the event.


The Securities Commission was formed in November to oversee trade on the capital markets, on which some 19 trillion rubles ($4.5 billion) changed hands last year, said First Deputy Finance Minister Andrei Kazmin.


The Expert Council, which advises the Securities Commission, met Monday to discuss the organizational structure of such self-regulating bodies.


But some speakers warned that the idea of self-regulation was anathema to many legislators, used to a tradition of strong state intervention.


"As long as people think the state should regulate [the capital markets] there will be deadlock," said Pyotr Mostovoi, first deputy chairman of the State Property Committee. "Legislative changes won't matter without a change in general psychology."


The commission itself will meet next week to approve a package of regulations -- including the right to refuse approval of a company's prospectus -- to present to President Boris Yeltsin, a source close to the commission said.


"The commission plans to use its ability to approve a firm's prospectus to close the market to issuers not protecting shareholders' rights," the source said.