“Demand creates supply, thus creating demand becomes top priority, followed by creating a comfortable IPO climate”, he said.

According to him, long-term investments are also important. “Traditionally long-term investors are private pension funds”, he noted.

Pankin remarked that private pension funds’ business is hindered by a number of unresolved problems, mainly legislative shortcomings. He mentioned the lack of pension payment procedures and funds liabilities. Moreover, today private pension funds cannot distribute year-end loss.

“Resolving these issues will help towards creating strong investors”, FFSM Head said.

Pankin also stated that another source of long-term investment is insurance companies. “Our insurance companies are under-capitalized and weak. The quality of their assets is also questionable”, he said.

A third source is the general public, private individuals. “We should return to the policy of tax breaks for long-term owners of securities”, says Head of FFSM.

Deputy Minister of Finance Alexey Savatyugin said that the insurance market today accounts for only 2% of the GDP. He says insurance companies have the right to place their reserves on the market, according to the Ministry of Finance regulation.

“We are drafting amendments to the regulations together with the FFSM. We propose more liberal amendments, while the regulator is more conservative”, he said.

Savatygin added that the creation of an International Financial Centre in Russia has given political undertones to certain issues. He mentioned the Central Depositary bill that serves the interests of foreign custodians more than the issuers.

“Let us then be open about it and admit that the MIFC has a purpose to make foreign investors more comfortable”, said Savatygin.