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HM Treasury News Release


141/99
7th September 1999

Welcoming the announcement, Miss Johnson said;

"The increasing globalisation of financial markets requires regulatory authorities to work together in order to tackle abuses of rules, regulations, and laws which harm investors. This is the seventh bilateral agreement on financial regulation which we have reached with a non-EU country, and will reinforce the strength of the City of London as a major international financial centre.

"The Memorandum of Understanding between the Treasury, the UK Financial Services Authority, the London Stock Exchange, and the Russian Federal Commission for the Securities Market will do a great deal to develop financial relations between us and improve the effectiveness of regulation.

"This agreement will provide a framework allowing the authorities to assist each other, providing investors with greater protection and security. We hope that our agreement will promote mutual understanding, both in terms of the operation of markets and their regulation. The establishment of clear channels of communication and greater engagement between our authorities will be of mutual benefit, and will support Russian companies that wish to list on the London Stock Exchange.

"The fact that we have been able to sign such an agreement is testament to the strides taken by the Russian Federal Commission for the Securities Market to develop an effective regulatory system in the field of securities.

"The Federal Commission, headed by Dmitry Vasiliev, has taken a lead in Russia in defending the rights of investors and establishing the duties required of market participants. I look forward to the continuation of good relations between the UK and Russian regulatory authorities."

NOTES FOR EDITORS

1. Under the Financial Services Act 1986, HM Treasury is responsible for handling requests for assistance from overseas regulatory authorities. Co-operation normally involves the exchange of regulatory information concerning market transactions, in order to assist the enforcement of rules, regulations, and laws.
2. In the UK, this information would normally be held or obtained by the Financial Services Authority and the London Stock Exchange (the UK's competent authority for stock exchange listing). Three major Russian companies are already listed on the London Stock Exchange.

3. In Russia, the Federal Commission for the Securities Market fulfills a similar role to the UK's Financial Services Authority. New laws on investor protection introduced in Russia in March this year have provided the Russian Commission with significant additional powers.

4. The Russian Commission was created in November 1994. It was granted Ministerial status in 1995, and joined the International Organization of Securities Commissions (IOSCO) that year. The Russian Commission was re-established in its current form by Presidential decree in July 1996, under the leadership of Mr Dmitry Vasiliev.

5. The Commission has developed a regulatory system which shares many features of the UK system, and the Commission has consistently stood firmly in defence of investors' rights.

6. Bilateral Memoranda of Understanding are not required between EU Member States in order to provide for mutual assistance. Outside the EU, the UK regulatory authorities currently have in force bilateral Memoranda of Understanding with the US, Australian, Swiss, Hong Kong, Japanese, and Chinese authorities.

7. Media enquiries should be addressed to Charles Keseru in the Treasury press office on 0171 270 5188 or Jeremy Hughes in the London Stock Exchange press office on 0171 797 1395.

8. If you have access to the Internet, you can find this news release and other Treasury information at www.hm-treasury.gov.uk

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