On 23 July 2013 the President signed Federal Law No. 251-FZ amending a number of laws due to the creation of a so called “mega-regulator” of the financial markets.
According to the Law, as of 1 September 2013 the powers to regulate, control and supervise the banking sphere and the financial markets belong to a single body- the Bank of Russia (the “Central Bank”). It is expected that this measure will contribute to the increase of stability in the Russian financial market as a whole as it will secure a more thorough analysis of systemic risks.
The Central Bank has taken over the powers of the FSFM in relation to a number of non-credit financial organizations, including, among others, professional participants in the securities market, management companies of investment and pension funds, insurance organizations and credit history’ bureaus.
Moreover, the Central Bank is now in charge of regulation and control of combating usage of insider information, voluntary and mandatory offers, disclosure of information and maintaining shareholders’ registers and will also register securities’ issuances. The licenses issued previously will stay in force (no need to apply for new licenses); the regulations issued previously will apply until the relevant regulations are issued by the Central Bank.
To fulfill the new functions, the Central Bank has established a new subdivision called the Service of the Central Bank for Financial Markets (according to the information published at www.cbr.ru on 12 and 22 August 2013).
The Law entered into force on 1 September 2013 (save for a few provisions that will enter into force later).
On 4 June 2013 the Central Bank issued Order No. OD-286 regarding securing loans granted by the Central Bank with the rights under loan agreements.
According to the Order, banks may secure loans from the Central Bank with the rights under loan agreements that are governed by English law (provided the rights meet the other criteria specified in Regulation No. 312-P of 12 November 2007). This possibility is available for banks whose net worth (capital) exceeds RUB 300 billion.
The Order entered into force on 11 August 2013.
On 30 July 2013 the Central Bank issued Letter No. 142-T “On Calculation of the Leverage Ratio.”
The Central Bank provides recommendations to banks on the calculation of the leverage ratio in accordance with the international banking standards envisaged in Basel III. The ratio is intended to limit the accumulation of risks by banks. It shall be calculated as the ratio of the bank’s core capital to its aggregate assets (that are not risk-weighted), conditional obligations and a credit risk under forward deals and derivatives.
The Central Bank plans to determine the date when banks will be required to publicly disclose the results of calculating the ratio in 2014. However, banks may decide to start the disclosure before that date.
The Letter was published in the Central Bank Herald on 7 August 2013.
On 9 August 2013 the Central Bank published information statements about organizational changes within the Central Bank.
- The main branches of the Central Bank for federal districts will be set up and the Central Bank’s territorial departments will become sub-branches of the main branches. The Moscow Main Territorial Department will be transformed into the Main Branch of the Bank of Russia for the Central Federal District (until 1 February 2014).
- The Department of Supervision over Systematically Important Banks will be established within the Central Bank (as of 1 October 2013). It is planned that eventually the Department will supervise banking groups and banking holdings.
The information statements are available at the Central Bank’s website at www.cbr.ru.