19.07.2016, 07:19
On Results of Going by Bank of Russia Through Procedures of Russian FSAP
OREANDA-NEWS. From September 2015 to June 2016, the Bank of Russia took part in the Russian Financial Sector Assessment Program (hereinafter, FSAP) launched by the mission of the International Monetary Fund and the World Bank (hereinafter, the Mission). Developed in 1999, FSAP is implemented on a five-year basis. It is aimed at assessing both the financial sector developing in all inspected jurisdictions and assessing the stability of the countries with systemically important financial sectors.
The completed assessment was carried out to analyse the compliance of the Russian regulation with Basel Core Principles for Effective Banking Supervision (hereinafter, BCBS principles), IOSCO Objectives and Principles of Securities Regulation (hereinafter, IOSCO Principles), IAIS Insurance Core Principles, Standards, Guidance and Assessment Methodology (hereinafter, IAIS Principles). Also, it was aimed at looking into the liquidity management system and issues of macroprudential analysis and the corresponding policy, issues of liquidation, financial rehabilitation and deposits insurance, mechanisms for countering the laundering of criminally obtained incomes and the financing of terrorism, stress testing and level of financial inclusion. FSAP also analysed the implementation by the Russian Federation of some key recommendations of the Mission received after the accomplishment of FSAP 2011 program. The volume of assessed events exceeded by 3-4 times FSAP 2011 scales.
The report published by the IMF to assess the Russian regulation as regards the implementation of IOSCO Principles reflects the analysis of compliance of the Russian securities market with principles relating to the regulators, principles for self-regulation, principles for the enforcement of securities regulation, principles for cooperation in regulation, principles for issuers, principles for auditors, credit rating agencies and other entities which provide information services, principles for collective investments schemes and hedge funds, principles for market intermediaries, and principles for securities exchange market.
Based on results of the assessment of compliance with IOSCO Principles, the Mission gave a high rating to progress the Bank of Russia made in their implementation in the Russian regulation.
Never before the Bank of Russia participated in FSAP events as a single financial market regulator, and Mission experts appraised the regulation and supervision in the Russian securities market especially in connection with Bank of Russia role as a megaregulator.
Alongside the necessity revealed by the Mission to further improve the risk-based approach to securities market supervision, the lack of immunity from prosecution for Bank of Russia employees arising in connection with their official duties, the lack of conditional (restricted) licensing within Russian legislation and expediency of transition from rule-based regulation to a more flexible principle-based model
Mission experts positively appraised the following:
successful fulfillment of several recommendations after the last assessment in 2011;
approval by the Bank of Russia of Guidelines for the Development of the Russian Financial Market in 2016-2018;
significant progress made by the Bank of Russia in the introduction of the risk-based supervision approach to securities market supervision;
joining in 2015 the IOSCO Multilateral Memorandum of Understanding which enabled the Bank of Russia to streamline information exchange including confidential materials with foreign regulators;
phase-in introduction of requirements to financial market participants as regards submission of reports by IFRS standards;
introduction of the self-regulation institute for non-credit financial organisations;
compliance with top global legislation practices on credit rating agencies.
Based on results of FSAP 2015/2016 assessment events, the Bank of Russia will launch efforts to implement FSAP Mission key recommendations and to get ready for a next cycle of programme events in 2021.
The completed assessment was carried out to analyse the compliance of the Russian regulation with Basel Core Principles for Effective Banking Supervision (hereinafter, BCBS principles), IOSCO Objectives and Principles of Securities Regulation (hereinafter, IOSCO Principles), IAIS Insurance Core Principles, Standards, Guidance and Assessment Methodology (hereinafter, IAIS Principles). Also, it was aimed at looking into the liquidity management system and issues of macroprudential analysis and the corresponding policy, issues of liquidation, financial rehabilitation and deposits insurance, mechanisms for countering the laundering of criminally obtained incomes and the financing of terrorism, stress testing and level of financial inclusion. FSAP also analysed the implementation by the Russian Federation of some key recommendations of the Mission received after the accomplishment of FSAP 2011 program. The volume of assessed events exceeded by 3-4 times FSAP 2011 scales.
The report published by the IMF to assess the Russian regulation as regards the implementation of IOSCO Principles reflects the analysis of compliance of the Russian securities market with principles relating to the regulators, principles for self-regulation, principles for the enforcement of securities regulation, principles for cooperation in regulation, principles for issuers, principles for auditors, credit rating agencies and other entities which provide information services, principles for collective investments schemes and hedge funds, principles for market intermediaries, and principles for securities exchange market.
Based on results of the assessment of compliance with IOSCO Principles, the Mission gave a high rating to progress the Bank of Russia made in their implementation in the Russian regulation.
Never before the Bank of Russia participated in FSAP events as a single financial market regulator, and Mission experts appraised the regulation and supervision in the Russian securities market especially in connection with Bank of Russia role as a megaregulator.
Alongside the necessity revealed by the Mission to further improve the risk-based approach to securities market supervision, the lack of immunity from prosecution for Bank of Russia employees arising in connection with their official duties, the lack of conditional (restricted) licensing within Russian legislation and expediency of transition from rule-based regulation to a more flexible principle-based model
Mission experts positively appraised the following:
successful fulfillment of several recommendations after the last assessment in 2011;
approval by the Bank of Russia of Guidelines for the Development of the Russian Financial Market in 2016-2018;
significant progress made by the Bank of Russia in the introduction of the risk-based supervision approach to securities market supervision;
joining in 2015 the IOSCO Multilateral Memorandum of Understanding which enabled the Bank of Russia to streamline information exchange including confidential materials with foreign regulators;
phase-in introduction of requirements to financial market participants as regards submission of reports by IFRS standards;
introduction of the self-regulation institute for non-credit financial organisations;
compliance with top global legislation practices on credit rating agencies.
Based on results of FSAP 2015/2016 assessment events, the Bank of Russia will launch efforts to implement FSAP Mission key recommendations and to get ready for a next cycle of programme events in 2021.
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