On 25 July 2013 the President of Russia signed the Decree “On abolition of the Federal Commission for Securities Markets, amending and recognizing certain acts of the President of Russia as ineffective” (hereinafter – the “Decree”).
Pursuant to the Decree Federal Commission for Securities Markets (hereinafter – the “FCSM”) shall be abolished from 1 September 2013. All financial markets regulatory, controlling and supervisory powers of the FCSM shall be transferred to the Bank of Russia (hereinafter – the “CB RF”), the latter becoming a “mega-regulator” of Russian financial market.
Before Decree execution the President signed on 24 July 2013 the Federal Law No. 251-FZ “On amendments to certain legislative acts of the Russian Federation connected with transfer of powers to regulate and exercise control over financial markets to the Central Bank of the Russian Federation” (hereinafter – the “Law”). In accordance with the Law, CB RFin addition to legal, regulatory and controlling functions over financial markets shall also oversee insurance and micro-financial activities, credit cooperation, activity of ranking agencies and activity related to pension savings investments. CB RF functions in sphere of financial markets shall be performed by committee of financial supervision that shall include the chief executives of the structural subdivisions of the CB RF.
Provisions on FCSM abolition and transfer of its powers to the CB RF of the Decree as well as the Law shall come into force since 1 September 2013. Establishment of the “mega-regulator” of Russian financial market, i.e. concentration within sole body of regulatory and controlling functions in respect to all sectors of financial market, is aimed at enhancement of regulation and supervision quality, at decrease of administrative burden and increase of overall financial market stability. It should be noted that creation of relevant structural subdivisions of the CB RF apparently will be made with the use of FCSM personnel. Also certain internal procedural documents of the CB RF specifying order of corresponding functions execution need to be adopted. Therefore, any conclusions about efficiency of the “mega-regulator” could be made not earlier than 4 quarter 2013.