New Russian financial service mega regulator to shake up competition law in sector
PaRR Strong evidence
The creation of the new Russian “mega-regulator” for the country’s financial services sector will result in some major changes in competition law within the financial sector, according to local antitrust lawyers.
“The Federal Law ‘On [the] protection of competition’, No. 135-FZ, dated 26 July, 2006, regulates, among other things, competition in financial markets,” according to Oleg Khokhlov, a partner at Goltsblat in Moscow, the Russian practice of Berwin Leighton and Paisner (BLP).
“The Mega-Regulator Law mostly provides for the technical changes of this regulation aimed to solely transfer the powers of the Federal Financial Markets Service (FFMS), related to the protection of competition, to the Central Bank of Russia (CBR),” Khokhlov said.
A second, Moscow-based antitrust attorney noted that threshold criteria for control would likely see a significant change under the “super-regulator”, given the way that financial services organisations were divided. “There is one material change that should be kept in mind,” Goltsblat’s Khokhlov said, highlighting that the thresholds that are necessary for the control of the financial organisations’ compliance with Russia’s Competition Law will be determined based on the category of the financial institution.
The Mega-Regulator Law divides all financial organisations into two categories for the purposes of the Competition Law: financial organisations, which are supervised by the CBR (the CBR Financial Organisations), and other financial organisations, such as pawn shops and leasing companies, which are not supervised by the CBR, he added. “For the time being, the CBR participates in determining these thresholds for credit organisations only and the FFMS is not vested with such powers in respect of other financial organisations,” he concluded.
The CBR Financial Organisations - by the Government of the Russian Federation subject to the CBR’s subsequent approval; and for Other Financial Organisations - by the Government of the Russian Federation only, Khokhlov said.
by Oliver Adelman in London
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