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Financial Market SROs Call for Gradual Implementation of Self-Regulation

22.08.2013 15:25 / Interfax

ussian financial market SROs are in favor of different SRO implementation rates in various financial market segments, said NAUFOR Chairman of the Board Alexey Timofeev at a press briefing on the liaison agreement signed by the Russian Banks Association (ARB), the All-Russia Insurers Union and NAUFOR.

According to Timofeev, “at present, Russian financial market sectors are differently prepared to SRO implementation”. He stated that stock market participants are ready.

Commenting the trilateral financial market sectors liaison initiative, Timofeev said that the unions are “very much alike. None is a fully-fledged SRO”. At the same time, NAUFOR Head noted that the three organizations represent the industry before the authorities. “Instilling self-regulation principles in the relationship between these bodies and the regulator creates more opportunities to share expert opinion on important issues, expedites solutions and allows flexible approach”, believes Timofeev.

He also voiced the opinion shared by all three professional unions, that the concept of financial market SROs should not lead to independent unions becoming extra parts of the supervisory system.

The idea was supported by the All-Russia Insurers Union President Igor Jurgens. He added that “issues that matter to the insurance community and have raised our concern, are so far taken into account by the Central Bank”.

“The prospects of implementing European Solvency 2 standards in Russian insurance must be discussed separately. These standards are based on three principles, only one of which can be applied to the insurance market without negative effect. Our concerns were heard by the Bank of Russia”, said Jurgens.

He also said that insurers have succeeded in getting across to the regulator their frustration with the draft bill on mandatory use of special depositaries. “As a result, the enactment of this norm is postponed until 2016”, said Jurgens.

Head of ARB Garegin Tosunyan told the press that the Russian Banks Association “is reluctant to assume extra responsibility in the SRO context, we are not trying to speed up the course of events”.

According to Tosunyan, successful implementation of self-regulation in the financial market will give it an added boost.

However, ARB Head sees the importance of avoiding negative impact in the process of SRO implementation.

“Failed SRO implementation, forced by the state and mandatory for all market participants, could lead to monopolized regulation, when SRO management becomes a vehicle for strong players’ interests in a particular market segment. Hushed debates and decision making in favor of a minority is legitimized at the expense of other members’ rights”, pointed out the Head of ARB.

The trilateral agreement was signed and enacted on 22 August. Parties have agreed to liaise on cornerstone policies for all financial market segments, consolidate their opinions in discussions with the state authorities. Parties will also share industry-specific information.

The agreement is voluntary and may be freely joined by other financial market associations.

Financial markets megaregulatorProject Group №1Igor JurgensAlexey Timofeev