September 15, 2011, 02:01 / Finance

The FFMS hopes to increase competition in the financial market without reducing the role of state banks

Consolidation and tightening of requirements for market participants are sometimes harmful for it, says FFMS Anton Trifonov

Head of the Federal Financial Markets Service Dmitry Pankin / S. Porter

The foundation of the financial market is laid by several large institutions competing with each other. And their preservation, limiting the processes of mergers and acquisitions seems to be one of the priority tasks. This position of the Federal Service for Financial Markets is set out in the updated version of the report on the development of measures to develop competition in the financial services markets, sent by the service to the Ministry of Economic Development (Vedomosti has a copy). Its authenticity was confirmed by two officials.

How exactly the FFMS intends to limit the consolidation process and how many large players make up the backbone of the market is not indicated in the document. A service representative declined to comment. At the same time, the report stipulates that increasing the number of professional participants should not become the goal of regulating competition.

Those supervised by the FFMS should not face an increase in quantitative requirements. The report notes that “according to a number of ministries, the existing capital requirements for dealer, brokerage and management companies in Russia exceed similar requirements for companies abroad.” This contributes to the monopolization of the industry, its “bankization” and, as a result, a decrease in the quality of services. But the market does not seem to lose much from this. These high requirements allow professional participants to “maintain their positions within the country against the backdrop of increasing competition from large foreign financial companies,” the authors of the report continue. And companies with a low capital base “are unable to compete in the international market and expand the scope of their activities due to the impossibility of significantly increasing the volume of their operations and customer base.”

Currently, the equity requirement for brokers, dealers and trustees is 35 million rubles, and from July 1 it was planned to increase it to 50 million rubles. For registrars - 100 million rubles, an increase to 150 million rubles was expected. However, the Federal Financial Markets Service decided to increase the standards only for companies managing investment funds, mutual funds and non-state pension funds, as well as for special depositories working with the same types of funds - from 60 million to 80 million rubles. According to NAUFOR at the end of 2010, the Federal Financial Markets Service canceled the licenses of 236 companies for failure to comply with equity capital requirements. In total, 276 licenses were canceled during the year.

There is no need to get hung up on the number of market participants - it is incorrect to say that the more there are, the better, and that the fewer, the better, says Deputy Minister of Finance Alexei Savatyugin. The size of a participant has little impact on its performance or susceptibility to fraudulent schemes, he says. There is a tendency to increase capital requirements, but this needs to be discussed depending on the risk that companies bear, says Savatyugin.