Regulator pulls dormant securities license from Finam
MOSCOW. Dec 29 (Interfax) - The Federal Financial Markets Service (FFMS) has revoked a dormant securities portfolio management license from Finam Investment Company.
The regulator said in a statement that the license was pulled due to "repeated violations of Russian securities legislation," including the FFMS's own regulatory and legal acts and Russian anti-money laundering legislation, in the course of a year.
The company, the regulator said, did not bring its activity related to the trusteeship of securities into line with an approved FFMS order, did not provide trustors with reports on the management of securities and did not identify or systematically update information about clients that had signed trustee agreements with Finam.
Vladislav Kochetkov, Finam's CEO, told Interfax that the license had not actually been used since 2006. Finam Management now carries out the trusteeship of securities but its license could not be surrendered because several hundred automatically renewable contracts were associated with it and these could not be severed unilaterally.
"In effect these are nominal trustee contracts with not more than 1,000 rubles remaining on accounts on average. This will not of course impact Finam's business," Kochetkov said.
He said the laws had changed in the last six years and that Finam could not have amended the contracts as the signatures of the other parties were also needed. The FFMS qualified this as a violation, and formally this was the case, the company is not arguing about that, he aid.
Finam will try and return the money, but the details that clients gave when they signed contracts is in many cases out of date.
The FFMS stripped Viktor Remsha, Finam's main shareholder and board chairman, of his qualification certificate as financial market specialist in March 2008 for not observing a ban on short selling, however the certificate was reinstated a month later.