About us / Project Groups

Project Group №2 →

Corporate law and governance, financial transaction taxes

Project Group №1

Financial infrastructure and financial market regulation


Back to Media

FCSM Will Access Bank Privacy

07.12.2011 11:00 / Izvestia

Next year the Federal Commission for the Securities Market (FCSM) may get access to bank details of every Russian citizen, including those who reside abroad. According to Izvestia, these amendments are part of the draft bill that has been revised by the Ministry of Finance and will be passed to the government. But the primary aim of the document is to bring the Russian financial market up to international standards. The Ministry confirmed that the draft bill had already been revised. Though details are still unconfirmed, they noted that the document would be passed to the government after revision.

The draft bill is introduces changes to the Securities Market Act and a number of other acts. This decision is connected with Russia’s will to join the Multi-lateral Memorandum of the International Organization of Securities Commissions (IOSCO). The authorities believe that this step will become another brick in the foundation of the International Financial Centre (IFC) in Moscow.

IOSCO members are 120 securities commissions and similar organizations around the world, including the Federal Financial Market Service (FFMS) of Russia.

According to FFMS, who initiated the bill, the need to reconcile local regulation and control with the IOSCO principles is linked to Russia’s G20 obligations. Legislative changes for the most part imply granting FFMS with power to request information. Today, the Service doesn’t have any access to bank details of private individuals. The bill permits such access. IOSCO believes that it is very important to cooperate with foreign regulators in the process of investigating financial crime. If FFMS doesn’t join the Memorandum in 2012, Russia will be relegated to the list of “non-cooperating jurisdictions”. The regulator considers it a serious obstacle on the way to collaboration with foreign regulators.

“This Memorandum is a very important declaration,” says Vladislav Reznik, Head of the State Duma Financial Market Committee and member of the MIFC Taskforce, supporting the FFMS standpoint. “Legislative changes will extend beyond the FFMS’s right to share information with foreign regulators, granting access to this information to companies and individuals. We comply with the rest of IOSCO requirements”.

The International Organization of Securities Commissions is joined by regulators that comply with the International Commission’s principles and practice them. There is a total of 30 principles; they are divided into nine groups: regulatory, self-regulatory, implementation, cooperation, issuers, mutual investment, brokers, secondary market, clearing and settlement. The principles’ aim is investor rights protection, market transparency and risk mitigation.

At the 10 October, 2011 Financial Market Council meeting, the Russian President charged Dmitry Pankin, Head of FFMS, to draft a project on joining the IOSCO International Communique. This task was carried out.

Vladislav Reznik believes that the bill will be approved by the government and will be introduced to the State Duma on time.

Market participants consider joining the IOSCO Memorandum a very important political and ethical task that won’t become an influential practice.

“I see taking part in such an organization as helpful only if we join the global market”, says Viktor Chetverikov, General Director of the National Rating Agency. “If our companies are of great interest to the inside foreign investors, then, of course, information on them should be provided without restriction. But we still have a long way to go towards that. If foreigners ask us for information, we will certainly translate documents into English and deliver them. But more often our regulators ask questions that are much more complicated, detailed, and uncomfortable, compared to foreign regulators.”

It seems that what matters for Russia today is the fact of joining the Memorandum. And there is no way to build the MIFC without it.

Project Group №1