| The FCSM and Pallada interpret the word “pension” differently In the struggle between the head of the Federal Commission for the Securities Market (FCSM) Igor Kostikov and the head of RAO UES of Russia Anatoly Chubais for influence on the Russian stock market, passions are heating up. Anatoly Chubais used the protracted conflict between the commission and one of the management companies - Pallada Asset Management, which operates on the Russian stock market - in order to ruin the reputation of Igor Kostikov. The FCSM yesterday notified Pallada (experts believe that this company was favored by the former head of the FCSM and Chubais protégé Dmitry Vasiliev) that changes to the rules and prospectus of the Pension interval fund have finally been registered.
Pallada insisted on these changes for more than six months (the mutual fund itself has been operating since December 1999), and the FCSM regularly refused to register these changes. As a result, Pallada filed a claim against the Federal Securities Commission in the Moscow Arbitration Court. A hearing in this case is scheduled for July 5. In its lawsuit, Pallada asks that the FCSM’s refusal to register changes to the rules and prospectus of its fund and the commission’s demand to change the name of the Pension Fund be declared illegal.
According to Pallada PR Director Vadim Soskov, two papers were received from the Federal Securities Commission: a notice of registration of changes and an order that Pallada must voluntarily change the name of the fund. The FCSM order is mandatory for execution by a securities market participant. However, the head of the legal department of Pallada, Alexander Gudkov, told the Vremya Novostei newspaper: “Only legal instructions are binding, but we believe that this instruction is illegal, because there are no regulations prohibiting the use of the adjective “pension” in the name of a mutual investment fund."
The FCSM thinks differently. Both sides of the conflict refer to FCSM Resolution No. 6 “On the names of mutual investment funds,” which specifies which names cannot be used to name mutual funds. But Pallada insists that this decree prohibits the use in names of words that indicate affiliation with a Russian or foreign state, as well as with territorial entities of the Russian Federation. That is, the FCSM has the right to refuse registration of a mutual fund, which will be called “Italian mutual fund” or “Lipetsk universal”. At the same time, Pallada notes that the commission had previously registered a mutual investment fund with the name “Petersburg Industrial”.
Therefore, Pallada believes that the order to “voluntarily” change the name means nothing more than the FCSM’s biased attitude towards the management company, Pallada. The commission's public relations commissioner, Alexey Turbin, told the Vremya Novostey newspaper that he saw with his own eyes that the adjective “pension” was present in Resolution No. 6 as prohibited for use. Deputy Chairman of the Commission Vladimir Milovidov explains the requirement not to call the fund “Pension” by the fact that shareholders may be deceived. By law, a mutual fund cannot promise any guaranteed profit, which means the shareholder may end up at a loss. By calling the fund “Pension”, according to Milovidov, its founders are being disingenuous, and it is possible that a pensioner who has invested money in this fund will demand a guaranteed pension from the mutual fund.
The commission's order states that the name of the mutual fund must be changed before July 1. According to Pallada, the fact that the commission requires a voluntary change of the name of the fund before the trial is aimed at destroying the position of the plaintiffs in court. According to Mr. Soskov, if the court, based on studying all the regulatory documents of the Federal Commission for Securities Markets, decides that the fund was named illegally, then Pallada will comply with its decision. In the meantime, Pallada continues to insist that if the commission has any new standards for the operation of pension funds, they are not enshrined in any way by law, and therefore they will not change the name before the trial. Elena GOSTEVA |
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