Reform Of Russia's Financial Regulator Sparks Market Uncertainty

by Phillip Morton, Investors Offshore.com

12 March 2004

The Russian government is to ring the changes concerning the regulation of the country’s financial markets by creating a single regulator, which will be known as the Federal Financial Markets Service.

According to a recent presidential decree, the new body will assume the regulatory role previously undertaken by the Federal Securities Commission, in addition to taking over the financial market supervision functions of both the Labour Ministry and the Anti-Monopoly Ministry. It will also take over the Finance Ministry’s audit role and all exchange regulatory activities.

The change has been broadly welcomed by analysts and traders in the country’s financial markets, who observed that the old regime under the FSC was somewhat bureaucratic. However, many have also complained that the current state of affairs has left a cloud of uncertainty hanging over the markets.

As yet, the government has not named who will head up the new agency, and is unlikely to do so for some days. The FFMS also does not currently have any staff.

The single regulator will be directly answerable to the new Prime Minister, Mikhail Fradkov.

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