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2 Dec, 2008 04:55

Insider trading to come into focus with new laws

Prime Minister Vladimir Putin has vowed there will be no restrictions on foreign capital in Russian stock markets. He also pointed towards a move to make insider trading, currently not punishable by law in Russia, a criminal offence.

There should no longer be a place for insider information on Russia's financial markets.  That's according to Prime Minister Vladimir Putin, speaking to members of the government presidium on Monday, about issues pressuring the country's bourses.

“By many measures, our trading floors still evidently take their cue from leading world centres. Besides that, they are excessively dependant on the mood on the foreign markets.  The latest events – a significant decrease in the stock price of Russian companies – shows just how uncomfortable the situation is, when the decision of which securities to buy or sell on the Russian markets is mostly decided outside Russia.”

Chief of the Federal Financial Markets Service, Vladimir Milovidov, indicated the government has suggested introducing criminal punishment for those who use insider information to manipulate share prices.

“Both measures are very important as they could provide short-term and long-term transparency for trading on the Russian financial market.  This would decrease current risks and create conditions to make the stock market the place to form prices for Russian assets.”

Yaroslav Lissovolik, Chief Economist, Deutsche Bank, Moscow says insider trading is one of the last obstacles to the full modernization of Russia's financial services.

“We want to see greater transparency in the stock market in terms of what the level of responsibility is, what the ownership structure is – and this is probably absolutely key to bringing back foreign investors and to boosting confidence in the domestic investor base as well.”

The government has given no timetable for the reforms.

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