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. Last Updated: 07/27/2016

Council Passes Law On Market Activities

Russia's upper house of parliament, the Federation Council, passed a securities market law Thursday that will ban companies from promoting and trading their own shares, a house member said.

A key aim of the law is to prevent a repetition of scandals such as the MMM financial pyramid scheme, in which millions of Russians lost their savings two years ago, said Leonid Chupeyev, deputy governor of the Tyumen region.

The law clearly defines activities of different capital market players, said Chupeyev, who cooperated on the law with Leonid Roketsky, the legislator responsible for it in the house.

The new law says a company issuing shares cannot quote or trade its own securities, and depositories cannot act as brokers, Chupeyev said.

The law names the Federal Securities Commission as the main regulator of the equities market.

The commission will license market participants and write criteria for public offerings of securities, Chupeyev said, adding that it can also specify which information must be disclosed to investors.

The law still must by signed by President Boris Yeltsin, who could do so next week, Chupeyev said.

?The chief of Russia's Federal Securities Commission expects to issue his country's first mutual fund licenses later this month and hopes the World Bank will approve a $90 million loan to help establish those funds before the crucial June presidential election.

In an interview Wednesday in Washington, Dmitry Vasiliev acknowledged that it will take several years before Russians develop confidence in an indigenous investment market. But he said the government is making strides to improve the uncertain investment environment.

He said his main goal in Washington is to complete negotiations with the World Bank on two loans, one for $90 million and the other for $30 million.