The bill aims to provide a legal framework for the public offering of foreign securities in Russia and is aimed at turning the country into a regional financial center, similar to major European trading floors. The document stipulates simplified terms of access for premium foreign equities to the Russian stock market, and a strict clearance mechanism for risky securities while envisaging measures for the protection of foreign investors.
The draft law requires foreign equities to be cleared by the federal securities market regulator and foreign issuers to be incorporated in a member country of the Financial Action Task Force (FATF).
The document stipulates a simplified access procedure for foreign securities listed on a foreign stock exchange and a strict procedure for unlisted equities which must first be approved by the securities market regulator.
"The adoption of the bill will help create conditions for transforming the Russian stock market into a full-fledged regional financial center comparable to Germany or Switzerland," a letter of comment reads.
The author of the bill, Vladislav Reznik, who chairs the Duma's financial markets committee, believes a delay could block the efforts to establish a regional or even and international financial center in Russia. Reznik also warned that Russia could as a result lose its national financial market and become an appendage of foreign financial hubs.
Reznik said a ban was currently in force on the public offering and sale of foreign securities on the Russian stock market.
Vladimir Milovidov, head of the Federal Financial Markets Service, described the Russian financial market as large.
"We are actually ranked the world's tenth," Milovidov said.
He added that around 35% of all investment in fixed assets was attracted through the stock market last year.
