ANATOLY GOLOMOLZIN: WE NEED TO MOVE TOWARDS COMMON EAEU EXCHANGE SPACE

Deputy Head of FAS discussed interaction and possibility of collaboration towards developing exchange trade in EAEU.

Deputy Head of FAS was a speaker at a “5 + 1” meeting of the member of Collegium (Minister) on competition and antimonopoly regulation of the Eurasian Economic Commission and Heads of antimonopoly authorities of the member-states of the Eurasian Economic Union during the Eurasian Week Forum in Bishkek.

Anatoly Golomolzin outlined FAS efforts in developing exchange trade under No.681 Order of the RF President of 21 December 2017 (“On the main directions of the state policy on competition development”) and emphasized their importance.

“To fulfill the Presidential Order, FAS, the Bank of Russia and the Federal Tax Service, in order to develop exchange trade and markets formed earlier the Exchange Committee¹. It works with all interested bodies, infrastructure organizations (exchanges) and market participants. Annually FAS holds more 200 meetings of the Exchange Committee, and around 500 organizations take part in its Sub-Committees”, explainedAnatoly Golomolzin.

“Exchange trade has become a tool of sustainable economic growth through increased efficiency of commodities and financial markets. Pricing transparency is increasing; violations of the antimonopoly law are prevented. Exchange quotations improve tax and customs law enforcement, creates the basis to determine economically justifies costs of regulated companies, and help adequately calculate budgetary spending”, pointed out Deputy Head of FAS.

He emphasized: “Over 400 exchange indicators are quoted on a regular basis including oil products, gas, coal, fertilizers, grain, sugar, derivatives. The turnover on the markets of physical exchange goods exceeds 1 trillion RUB, on the market of derivatives it is more than 20 trillion RUB annually”.

Deputy Head of FAS added that in 2018 FAS made amendments to the Governmental Decree on expanding the list of commodities, to which the Decree applies.

“According to the information form Exchanges operating in Russia, oil bitumen, compounds of phosphorus, nitrogen or potassium, round timber are traded at least on one exchange. At the same time, off-exchange trading account for a considerable share on these markets. Therefore, registration of off-exchange deals with these goods is a must to form off-exchange indicators on these goods in addition to on-exchange indicators”, said Anatoly Golomolzin.

“The established practice shows that market pricing mechanisms should be based on objective indicators formed with data on off-exchange prices, on-exchange prices and comparable on foreign markets (net back). Only integrated consideration of the three gives an actual domestic market price for the commodities. Price indicators based on the data about the registered off-exchange deals help establish contractual market relations and develop market pricing, prevent speculation on markets.  End consumers get a possibility to acquire goods at fair, competitive prices”, concludedDeputy Head of FAS.

The participants discussed possible cooperation for developing exchange trade and emphasized the need to intensify joint efforts in this area.

“Along with the Russian Federation, experience on developing exchange trade is also accumulated in Belarus, Kazakhstan, and Uzbekistan. The concepts and programmes on forming common EAEU markets on gas, oil, petrochemicals, electric power specify that exchange trade is a key element for developing markets and market pricing.  We believe it is necessary to move towards establishing common exchange space in EAEU and the CIS”, summed up Anatoly Golomolzin.

Note:

¹ Deputy Head of FAS Anatoly Golomolzin is Chairman of the Exchange Committee.