Russian regulator grants foreign issuers market access

Russia’s securities regulator, the Federal Service for Financial Markets (FSFM), has recently adopted a new legislation for foreign issuers wanting to place or publically circulate securities in Russia.

Dechert LLP, an international law firm, said the legislation will come into legal effect after its official publication. The exact date of this has not yet been announced.

The new legislation outlines the registration procedures for foreign issuers in Russia. The list of foreign stock exchanges and clearing houses permitted to circulate their securities in Russian consists of 53 European, US and Asian stock exchanges and 62 clearing houses, according to a statement published on the FSFM website.

Previously, Russian regulations did not specify the procedure for registration of securities by foreign issuers, Dechert explains. This effectively prevented foreign issuers from placing or publicly offering their securities to Russian investors.

The new order fills this gap by specifying in detail the FSFM review process, providing a list of documents required for the registration and listing the grounds on which the registration may be denied.

The legislative change may spell an expansion of investment instruments on offer to Russian investors. Experts agree that this would be a positive development for the local market.

One local expert, Simon Fentham-Fletcher, chief of staff at the Moscow office of Renaissance Asset Managers, thinks Russian retail investors are in desperate need of more international products to be marketed inside Russia.

If they have this option, they would no longer have to open bank accounts in Switzerland and Guernsey and will be able to accumulate international assets without capital flight, he said. It would also allow them to hold more diversified portfolios and not rely so much on the domestic market.

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