FAS DISCUSSED SOME ASPECTS OF DEVELOPING COMPETITION IN THE MARKET OF FINANCIAL SERVICES

To pursue the Road Map [1] for developing competition in the market of financial services, Inter-departmental Working Group had a meeting on November 8, 2018. Representatives of the State Duma, the Federation Council of the Federal Assembly of the Russian Federation, the Ministry of Finances, the Ministry of Economic Development, FAS and the Bank of Russia.

Opening the meeting, the Group Chairman, Deputy Head of FAS Andrey Kashevarov, said: “Some of the items on the agenda that we are going to discuss are of revolutionary and the breakthrough mature and require especially careful elaboration and analysis”.

One of such items was Clause 1 of the “Financial Markets” Section of the Road Map for creating competitive qualification conditions for credit organizations to provide some types of banking services and take part in soft financing programmes.

According to Head of FAS Department  for Control over Financial Markets, Olga Sergeeva, there are over 50 regulatory acts of different levels that set excessive requirements to select credit organizations for exercising particular types of activity.

In FAS opinion, some qualification conditions must be excluded, for example, particular size of capital (own funds) and state participation in the authorized capital of a credit organization, as well as a requirement to include the credit organization in the pool of systemically-important credit organizations.

“Such requirements do not characterize financial stability and solvency of a credit organization. We believe that certain requirements are possible but we insist that it is should concern financial stability”, said Olga Sergeeva.

Members of the Working Group generally supported the FAS position that such selection criteria for credit organizations are unjustified and instructed a special Working Sub-Group on the Market of Banking and Micro-Financial Services to address the issue and draft a Report for the Government of the Russian Federation.

The participants also discussed approaches to implementing the Road Map measures designed to create equal conditions for transfers from bank accounts of physical persons to accounts of third parties opened both in the same and in different credit organizations (Clause 7 of the “Financial Markets” Section of the Road Map).

For instance, in the view of Olga Sergeeva, FAS is receiving complaints about operations of organizations on the markets of funds transfer. Such complaints mention, in particular:

- Commissions for funds transfer on the cards of physical persons issued in different subjects of the Russian Federation (regions)

- Different tariffs set by credit organizations for transfers on accounts within a single credit organization and between different credit organizations.

The Sub-Groups on the Markets of Banking and Micro-Financial Services and on Payment Services will continue framing decisions on the above issues.

The experts also considered proposals on changing the procedures for composing the Committee of the users of central depository services that put restrictions for including services users, affiliated with the Central Depository Board, in the Committee, and creating conditions to ensure representation of service user groups with different scope of operations, in the Committee.

A special Working Group will continue elaborating measures to take into account the interests of all market participants shaping the tariff policy of the central depository.

Finally, Deputy Head of FAS Andrey Kashevarov announced a meeting of FAS Expert Council for Protecting Competition on the Market of Financial Services by the end of the year. The Expert Council will discuss measures for implementing some provisions of the Order of the President of the Russian Federation on the main directions of the state policy for developing competition on the market of financial services [2].

Reference:

The Working Group for Developing Competition on the Market of Financial Services, formed in accord with No. 535/18 FAS Order of 23.04.2018 to implement No. 618 Order of the President of the Russian Federation of 21.12.2017, comprises representatives of the State Duma, the Federation Council of the Federal Assembly of the Russian Federation, the Ministry of Finances, the Ministry of Economic Development, FAS and the Bank of Russia.

the “Financial Markets” Section of 2018 – 2020 Action Plan (Road Map) for developing competition in the sectors of the economy of the Russian Federation and transition of particular sphere of natural monopolies from the state of natural monopoly to the state of a competitive market, approved by No. 1697-r Order of the Government of the Russian Federation of 16.08.2018.

[1] Action Plan (Road Map) for developing competition in the sectors of the economy of the Russian Federation and transition of particular sphere of natural monopolies from the state of natural monopoly to the state of a competitive market, approved by No. 1697-r Order of the Government of the Russian Federation of 16.08.2018.

[2] No.618 Order of 21.12.2017