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Russia to create new laws to fight insider trading

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The head of Russia's Federal Financial Markets Service (FFMS), Vladimir Milovidov, said Monday that next year Russia will create new laws that regulate insider trading and establish a compensation fund for victims of investment fraud. The compensation fund is to be modeled after a program of the Russian Deposit Insurance Agency (DIA), which insures individual bank deposits. Milovidov's comments came as an attempt to clarify statements made earlier by Prime Minister Vladimir Putin to a meeting of the government presidium in which he condemned the effect that foreign markets have on Russia's domestic share prices, but added that Russia did not want to restrict foreign investment. Also on Monday the government approved a set of draft laws that would punish the manipulation of stock prices. The laws must now go before Russia's State Duma for approval. The FFMS was originally created in 2004 as a successor to the Federal Commission for the Securities Market (FCSM) through a decree by then-president Putin. It was given the duty of controlling and supervising activity in the financial markets, including the activity of exchanges, and issuing relevant regulations. In 2006, the FFMS had proposed laws against insider trading, but the original draft was considered inadequate. Last year Russia created a new division within the FFMS in order to help combat insider trading, but it is unclear whether this has had any effect. Russia has two primary stock exchanges, the RTS and the MICEX.

Full post as published by JURIST - The Paper Chase on December 02, 2008 (boomark / email).