Regulator U-Turn opens the way for Russian expansion

Published on July 26, 2011 by David Turner · No Comments

Russia could be set to make an impact on international markets

Russia’s Federal Financial Market Service is considering a bill that would eliminate IPO restrictions and allow companies to issue equity outside the country.

Under current regulations, Russian companies face strict domestic guidelines which were designed to promote domestic growth and prevent significant funds being floated internationally.

Speculation is growing though, that such guidelines could become a thing of the past.

Under the proposed bill, companies will be able to offer 100% of securities abroad as opposed to 50% at present.

The decision is consistent with a government policy to loosen the restrictions on financial companies who wish to tap into international markets.

President Dmitry Medvedev himself announced at a recent economic forum that companies were set to receive greater freedom when listing abroad.

This latest move appears to be the beginning of the fulfilment of that promise.

The FFMS itself is also under new management, which could further explain the change in direction.

Dmitry Pankin, the former Deputy Finance Minister, has taken over and the immediate softening of the Russian stance on outside investment opportunities will be welcomed by western banks.

Indeed, Western investment bankers were previously furious over previous legislation which restricted Russian companies to being allowed to list just 30% global depositary receipts abroad.

Decisions like this have caused tensions within Russia for those companies looking to see what the international markets have to offer.

If the latest proposals go through, they may get a chance to find out.

Transfer money to Russia

Are you looking to invest in Russia? If so, it is a good idea to think carefully about how you will be transferring money to Russia. Foreign currency exchange rates quoted by banks are usually not as good as the exchange rates available through specialist currency dealers.

So if you are sending money to Russia, which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.