Govt. Wants Names from Offshore
All participants in the securities market will soon have to reveal the names of their ultimate owners under a decision of the Russian Federal Financial Markets Service that has been registered with the Ministry of Justice. After the order is published, market participants will have 15 work days to provide information on all persons who “directly or indirectly own 5 percent or more of the authorized capital.”
The order applies to all companies licensed by the Federal Financial Markets Service, that is, brokers, dealers, companies involved with deposits and clearing, asset management and registration of securities and stocks. Most of the major presences on the market are registered offshore. Financial Service head Vladimir Milovidov commented to Kommersant that “now there is regulation of the mythological shares of mythological participants… It is simpler to regulate transparent ownership than to create restrictions.”
This is not the first such attempt, but it may be the most effective, since market participants may cooperate with the regulator in hopes of receiving anticrisis support. Observers note that, as financial institutions struggle for existence, they lack the energy they once had to resist efforts at their regulation. However, such screens as nominal ownership, funds and trusts will remain available. The Federal Financial Markets Service will allow noncommercial organizations to be listed as owners. There are no sanctions specified for noncompliance with the new order but, Milovidov notes, “theoretically cancellation of licenses is possible.”
www.kommersant.com
All the Article in Russian as of Nov. 13, 2008
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Photo: Alexander Miridonov
