DMITRY MAKHONIN: WE SEE EXCHANGE TRADE DEVELOPMENT THROUGH CREATING MOTIVATIONAL MECHANISMS

Head of FAS Department for Regulating Fuel-and-Energy Complex and Chemical Industry discussed exchange trading and the prospects of its development at the XII International Forum – Russian Precious Metals Market

Dmitry Makhonin pointed out: “Under the conditions of globalization, competition between competences on establishing pricing centres is growing.  Analysis of the current indices gives an understanding that there is certain mistrust in the today’s price configuration”.

He gave an example of a case of the European Commission, which investigated operations of information agencies: international analytical agencies that form indicators and “mixed” other brands as North Sea oil. The European Commission issued recommendations to improve their techniques.

According to Dmitry Makhonin, that is why “more transparent indicators should replace current price “devices”.

“Goods with export potential should be quotes on our sites”, added Dmitry Makhonin.

Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industryinformed that at the International BRICS Competition Conference in Moscow in September arrangements were reached to form a Working Group in order to establish common exchange space  in BRICS.

“All participants expressed their interest, so in the near future we shall form a Working Group to study the law on developing on-exchange trade in BRICS and approximating national legislations, exchanging experiences and establishing the common exchange space”, underlined Dmitry Makhonin. “The Eurasian Commission has been working on it for already several years, and at the beginning of December we are starting the first test trading with natural gas at единой the unified exchange”.

FAS activities are guided by No. 618 Presidential Order that laid the foundation for competition development in Russia, and, in particular, specified that on-exchange trading is one of the areas for developing competition in the Russian Federation.  The Government of Russia devised Road Maps for developing competition in all sectors of the economy, and in particular, a Road Map for exchange trade development, which, apart from improving Russian law, provides for exchange trade with several products, particularly, on the market of precious metals.

“We are aimed at developing spot trade with actuals. Now around 25-30% of motor petrol and diesel fuel consumption are traded in Russia, around 7% of gas, exchange trade with timber and wood products, coal, mineral fertilizers and some other commodities is developing”, pointed out Dmitry Makhonin.

According to him, the Government is building up motivation for participating in exchange trading.

“We consider priority logistics of exchange goods, subsidizing agricultural producers that buy mineral fertilizers through the exchange, and other motivational mechanisms”, explained Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industry. “There are markets where the state tries to forcefully put things in order, for example, in the near future we expect the Government to pass a Decree on export of scrap ferrous and non-ferrous metals only through the exchange trading”.

“We see development of exchange treading through creating motivational mechanisms, so devising the Maps we should discuss and make a number of the key decisions”, underlined Dmitry Makhonin and invited the Conference attendees to participate in the Exchange Committee where the parties can discuss all issued raise at the Conference and reach a consolidated opinion with regard to on-exchange trade and possibility to form representative indicators at the Moscow Exchange.