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Corporate law and governance, financial transaction taxes

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Financial infrastructure and financial market regulation


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FFMS May Take Back Functions from Finance Ministry

04.07.2012 19:49 / Interfax

The Federal Financial Markets Service (FFMS) may take back the functions transferred out of its purview to the Finance Ministry a year ago.

Presidential Aide Elvira Nabiullina held a meeting Wednesday on redistribution of functions between the FFMS and the Finance Ministry, said two financial market sources.

The meeting was attended by all financial bodies, including FFMS Head Dmitry Pankin, Deputy Finance Minister Sergey Storchak, First Deputy of the Central Bank Alexey Ulyukaev and Deputy Minister for Economic Development Oleg Fomichev. Head of the MIFC Taskforce Alexander Voloshin also took part in the meeting.

“We talked about the outcome of functions redistribution between the FFMS and the Finance Ministry a year ago, we also discussed what steps should be taken to improve financial market regulation”, said Head of National Stock Market Participants Association (NAUFOR) Alexey Timofeev. He declined to comment further.

Most of the session participants agreed that the redistribution of functions between the authorities was “not the best idea”. The Finance Ministry took an opposing stand, said a source.

According to the source, the debate revolved around two concepts: increasing the FFMS oversight functions by expanding its legislative role, namely drafting regulations, norms and procedures.

He also stated that the FFMS wants the right to draft and submit laws to the Duma. “In practice, some federal services have been granted this right, while others have not. The FFMS wants to be among the former”, he said.

Another source claims that the sides agreed to return powers to the FFMS, especially being able to pass regulations without Finance Ministry approval. “The return of legislative power to the FFMS was less actively discussed than the change in the complex regulation approval chain, where the FFMS has to go to the Finance Ministry for approval, or the other way around”, he said.

Another point on the agenda, he said, was transferring the private pension funds regulation exclusively into the FFMS purview. Today, private pension funds are regulated by the Ministry of Health and Social Security, the Finance Ministry and the FFMS.

He said that the return of powers to FFMS will require more hires and higher salaries.

The meeting agenda included the need for a National Financial Stability Council in Russia, the equivalent of the National Banking Council, that has been active in the banking segment of the financial market for a number of years.

The participants were vague about the outcome of the session.

The Presidential Financial Markets Development Council, headed by First Deputy Prime Minister Igor Shuvalov, is slated to meet on 10 July. “It is possible that the FFMS functions issue will not be discussed”, said a source close to the Council.

Project Group №1Оleg FomichevElvira NabiullinaDmitry PankinIgor ShuvalovAlexey TimofeevAlexander Voloshin