FAS, the Federal Tax Service and the Central Bank signed an Agreement on the Exchange Committee

The Federal Antimonopoly Service (FAS Russia), the Federal Tax Service and the Central Bank signed an Agreement of Cooperation to develop markets (the Exchange Committee).

The Agreement is signed to execute instructions given by the President of the Russian Federation Vladimir Putin.

The main objective of the Agreement is to improve the mechanisms of establishing representative price indices and (or) market indices based on monitoring the level and reasonableness of prices for the goods allowed for organized trading and devise proposals for developing the markets.

The priority tasks of the Exchange Committee include developing commercial infrastructure, establishing market indices and prices and advancing exchange trading with oil, oil products, liquefied hydrocarbon as and natural gas.

Since January 2015, upon a FAS initiative, representatives of large oil companies and exchange trading sites, independent participants of the oil products markets, executive bodies of the Russian Federation and expert organizations met on a regular basis in the format of the Exchange Committee.

So far, more than 30 meetings took place where participants discussed the current situation on the oil and oil products markets, undertook measures towards developing and improving exchange, and devised recommendations for market participants designed to prevent possible violations of the antimonopoly law.

According to the Agreement, cooperation between FAS, the Federal Tax Service and the Central Bank, within the scope of their competences, is aimed at solving the following issues:

1. Developing commercially-viable and competitive markets of the goods allowed for organized trading (organized goods markets).

2. Creating infrastructure pre-conditions to form representative price indices and (or) indicators for organized markets, particularly, reducing exchange and off-exchange price indices and (or) indicators to a comparable level and enabling their use for taxation purposes.

3. Drafting proposals designed to increase transparency of off-exchange markets.

4. Drafting proposals to improve the mechanisms of organizing trading on the markets.

5. Drafting proposals designed to elaborate unified pricing approaches for regulatory purposes in accord with the parties’ conferences.

6. Devising recommendations on hedging (reducing) risks related to selling goods on the organized markets.

7. Drafting proposals designed to honouring obligations by the bidders on the organized markets.

8. Drafting proposals on organizing and improving public procurement and commodity interventions on the organized markets.

9. Discussing legislative and other initiatives on improving the law of the Russian Federation to achieve the Agreement goals and objectives.

10. Other objectives aimed at achieving the Agreement goals.