29 Jun 2010 16:38

Regulator sees new investors coming to Russia more quickly

MOSCOW. June 29 (Interfax) - New investors are coming into Russia more quickly, Vladimir Milovidov, head of the Federal Financial Markets Service (FFMS), said at the investment conference organized by Renaissance Capital.

"It [the financial market] is becoming more diverse, more popular, and however strange it may seem, new investors, above all individuals, are coming in more quickly. They are currently speculative minded, fairly aggressive, but it is still this category of investor that will be generating demand for financial instruments for a while," Milovidov said.

This sort of investor will also prompt a different quality of investors to enter Russia in time. "This category is only just emerging, but it is still an environment that will gradually produce more in the way of specialists, connoisseurs, people who understand what is going on in the financial market and who will then pull others in," he said.

The main thing is to protect investors but also to watch what classes of investor come to the Russian market, he said.

Investment in various financial instruments is on the up. "Our job is to make this a more widespread phenomenon via regulation, by putting the conditions in place," Milovidov said.

Recent legislation and legislation that is in the pipeline will add quality to the financial markets. "I think that in time we'll be able to rank among those markets that can claim the role of an international financial center, and that is becoming clearer and more attainable," he said.

Russia passed a large package of laws regulating the derivatives market last year. The new standards are being discussed in earnest at international forums. The Russian regulator is also following how similar laws are passed in the United States.

The Volker Rule, for example, practically bans banks from buying financial instruments, securities and derivatives. Russia is not planning such measures. "Each market should develop in its own way. Russia has never delineated investment and banking activity and I don't think we should in the future," Milovidov said.

But the changes taking place in the U.S. could affect the Russian market, "above all where derivatives are concerned, as they constitute 90% of the commodities market, a key market for Russia. The departure of major banks from that market could theoretically affect commodities prices," Milovidov said.