Two ministry sources told Interfax that on 20 February, the MIFC Taskforce will convene to discuss the document. “There will be a battle (at the session)”, one of the sources said of his expectations.

The Ministry of Finance draft is 41 pages long, 17 of which are addenda. There are two added forms: request for CD status and refusal letter.

The Central Depositary Act is in force since 1 January 2012. According to the law, CD candidates are to be accredited by the Federal Financial Markets Service (FFMS), however, the procedure is to be drafted by Ministry of Finance.

Deputy Head of the Central Bank Sergey Shvetsov said earlier that the Central Depositary may be accredited prior to 1 April 2012. “Hopefully, the regulators will waste no time”, he said.

According to the draft, FFMS will be authorized to grant the Central Depositary status as well as annul, suspend and renew.

The service is to arrive at the decision to grant or deny the Central Depositary status within four months of the application date.

If the service turns down the application, the candidate may file for the status again in 6 months of the refusal.

The draft states that the application to the FFMS must be accompanied by a list of 52 documents (107 in total), including copies of Directors’ workbooks, shareholders list and affiliation certificate, list of nominee accounts opened at issuers’ registrars.

All documents must be print copies.

The FFMS may refuse to grant the CD status if the applicant fails to comply with the Central Depositary Act, if incorrect or incomplete data is found in the filed documents, or if such documents fail to comply with the legal requirements, or if another legal entity is already appointed Central Depositary.

The applicant who has been granted the CD status shall present a business schedule for the next year no later than 1 December.

Grounds for suspension and annulment of the Central Depositary status are multiple violations of business disclosure to FFMS within a year, and violation of the Securities Market law. Also, the status may be suspended if the professional market participant’s license is revoked, or proprietary reserves fall below the legally required minimum at any given reporting date (RUB 4bn), or if incorrect data is disclosed to the FFMS.

The suspension of the CD status may last up to 6 months.

The decision to annul the CD status may follow due to liquidation, a filed request to terminate the status, revoked (annulled) professional market participant’s license or insolvency of the Central Depositary. Grounds for annulment include grave or repeated violation of the Central Depositary law, knowingly submitting false reports to the FFMS or failure to comply with FFMS directives in time.

Trading infrastructure, Project Group №1, Sergei Shvetsov, Alexander Voloshin