ANATOLY GOLOMOLZIN: EAEU CAN PLAY ITS ROLE IN DEVELOPING EXCHANGE TRADE

Deputy Head of FAS believes that market pricing, exchange and off-exchange market indices form the basis of these markets

On 28 February 2020, the Eurasian Economic Commission (EEC) brought together Heads of competent (antimonopoly) bodies of the member-states of the Eurasian Economic Union and a member of the Collegium - EEC Minister on Competition and Antimonopoly Regulation, Serik Zhumangarin, for a regular session in Moscow.

Deputy Head of FAS Anatoly Golomolzin discussed development of promising approaches to promoting exchange trade on commodities and financial markets.

“Exchange trade development is one of the main directions of the state policy in the Russia, embedded in an Order of the President of the Russian Federation¹. To execute the Order, Road Maps are drafted, particular, on systemic development of exchange trade on the markets, market pricing for the key groups of goods, attracting players on commodities and financial markets for participating in exchange trade”, started his speech Anatoly Golomolzin.

He outlined the role of the FAS Exchange Committee, founded by the Bank of Russia, FAS and the Federal Tax Service. The governmental agencies involved in the work of the Exchange Committee include the Ministry of Industry and Trade of Russia, the Ministry of Agriculture of Russia, the Ministry of Energy of the Russian Federation, the Federal Customs Service as well as more than 500 economic entities. The Exchange Committee holds over 200 sessions annually on conceptual as well as practical aspects of developing exchange trade.

The Exchange Committee emphasized that applying exchange quotations, off-exchange price indices and prices indices of comparable foreign markets helps resolving a number of regulatory tasks in antimonopoly, tariff, tax and budgetary policies.

“Over 400 price indices of various physical commodities and derivatives for basic commodity assets, including petrochemicals, coal, gas, oil, liquefied hydrocarbon gases, fertilizers, metal scrap, timber, grain, sugar, etc., are being formed and are regularly published in Russia”, stated the speaker.

According to Anatoly Golomolzin, exchange trade is developing along the two main directions:

“SPIMEX development trends are from online commerce and exchange trade with physical commodities to deliverable futures contracts. Here mostly traditional players of the markets of physical commodities, that have an exchange nature, are involved. At the same time, infrastructure companies (“Transneft”, “GazpromMezhregionDelivery”, “Russian Railways”) obtain a new status of commodities delivery operators that considerably improve performance of the relevant markets. At the Moscow Exchange, development takes place from exchange turnover of derivatives for basic financial assets to exchange trade with derivatives for basic commodity assets. The range of exchange trade participants expands significantly due to diverse players of financial markets – legal entities and physical persons, Russian and foreign participants”.

“The statistics of the year’s results is quite impressive”, added Deputy Head of FAS. “Exchange trade on the market of physical commodities in 2019 was about 1 trillion RUB, on the markets of financial derivatives for basic commodity assets – over 20 trillion RUB. What is essential – a modern exchange ecosystem is formed gradually”.

“Exchange trade is not simply a tool for organizing auctions. Exchange trade provides for hedging the risks of price fluctuation, capital overflow between the real and financial sectors of the economy, and the modern conditions of doing business. We should understand that it is hard to be limited by only the EAEU. Exchange trade concerns world economic relations, they require engaging a broader range of participants in these processes. Such work is undertaken at both bilateral and multilateral basis – the CIS, BRICS and other platforms. The EAEU can play its role in developing exchange trade, particularly, establishing common markets of oil, petrochemicals, gas and electric power. Market pricing, exchange and off-exchange market indicators form the basis of these markets”, summed up Anatoly Golomolzin.

¹ № 618 Order of the President of the Russian Federation “On the main directions of the state policy towards competition development” of 21.12.2017.