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Russia eyes opening its stock market

The Federal Financial Markets Service is looking to open the Russian stock market for both companies and investors by allowing easier access to the domestic market and simplifying the Russian share classification system.

The Russian equities market system is complex and doesn't make buying shares easy for investors, or listing for companies.

To address this the Federal Financial Markets Service is looking to standardise the classification of foreign and domestic shares. It's also looking to streamline the listing process for both Russian companies and any foreign companies which may wish to list in Russia.

Aleksey Timofeev, the President of the Russian National Association of Securities Market Participants, says this would strengthen the country’s investment market.

“This regulation will allow Russian investors to work on international exchanges. Russia's equities market is growing and becoming more attractive for foreign investors, who are ready to come to Russia,” he believes.

Many Russian issuers outside the natural resources sector currently are listed on the international exchanges only. Now they will get chance for local listing and local investors will be able to diversify from the current markets structure

Aleksand Golovtsov,
Head of Research, Uralsib

For Russian institutional investors it is impossible to buy shares in global companies unless they are listed in Russia, and also impossible for ordinary Russians to buy international shares unless they use a broker with international operations.

Analysts say the proposed changes will reduce investment risks and open up the possibility of greater investment in a wider range of sectors.

Russian stock exchanges are also looking at a range of moves to increase their international integration by adopting international standards and procedures.

These proposals will require changes to the law and take some time. But analysts say more moves can be expected, and will lead to wider investment opportunities for Russians and better access to Russian companies for international investors.