Moscow government to lay groundwork for new financial center

President Medvedev has ordered the government to get to work on turning Moscow into a global financial center.

The main aim of the program is to make the Russian financial market more accessible to foreign institutions – first off, by cutting red tape. For example, foreign companies will not need to have their documents fully translated into Russian, as before.

The president also suggested expanding the powers of the Federal Service for Financial Markets – so that the officials could fully protect investors’ interests.

Another idea is to establish a structure for collecting information about financial tools and over-the-counter financial transactions. The Bank of Russia is to come up with suggestions on creating a liquid futures market for major commodities exports produced in the country.

Additionally, Medvedev ordered amendments to securities legislation, making sure Russians have the opportunity to independently issue debt securities to be traded on foreign markets.

Medvedev said he wants to see concrete results by March, emphasizing that it is mainly Prime Minister Vladimir Putin’s responsibility to ensure the job gets done on time.

Seeing that Russia lacks its own investors, analysts say, foreign investors will not make the choice of coming to Moscow. Without investors, meanwhile, there will be no one to buy the securities of the major players.

“Russia’s main problem is a lack of domestic investor base,” Aleksandr Abramov, a professor in the Stock Market and Investments Department of the Higher School of Economics, told the Rossiyskaya newspaper. “This is why foreign investors will continue choosing New York or London over the Russian trading platforms.”

Other specialists, however, say that the reform has bright prospects, as the changes already made by the government are bearing fruit.

“Some things are slowly but surely changing in the right direction,” chief economic of Deutsche Bank Russia, Yaroslav Lissovolik, told RT. “Thanks to the right measures, Russia’s stock market is becoming more attractive. Even Ukraine started using the Russian ruble – to pay for gas deliveries.”

This year, Moscow ranked 61st in the Global Financial Centers Index – that’s an improvement from 2010, when it held the 68th position.

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