OREANDA-NEWS. June 08, 2011. The Federal Antimonopoly Service (FAS Russia) held a joint meeting of the FAS Expert Council for Developing Competition on the Market of Oil and Oil Products and the FAS Expert Council for Developing Competition on Financial Markets (the Securities Section), reported the press-centre of FAS Russia.

The meeting involved representatives of the State Duma of the Russian Federation, the Ministry of Economic Development, the Ministry of Energy, the Federal Financial Market Service, “FinPotrebSoyuz”, commodity exchanges, oil companies and brokers that take part in exchange trading with oil products, rating agencies.

Participants discussed the issues of creating conditions for competitive exchange trading that involves monopolists, developing liquidity and fair market prices through exchange trading with oil products.

“Despite quantitative increase of exchange trading, FAS Russia is not happy with the quality of exchange trading”, said Deputy Head of FAS Russia Anatoly Golomolzin. “Trading sessions are not regular. Quite often large transactions take place (more than half of transactions are for 2000 tons and more), cutting off small independent participants. Some trading participants are unable to buy fuel through exchange (12%). Some requests are always granted (10%) or granted in more than half of cases (16%). The absence of normal market trading is confirmed by the fact that 18% of buyers buy goods only from a single seller. In majority of cases these companies are members of the same group of persons. Hence, FAS has questions to both oil companies and exchanges”.

In his turn, Deputy Head of FAS Russia Andrey Kashevarov said that in course of investigations FAS Russia established cases when transactions were completed before all requests had been submitted as well as cases of unreasonable economic behavior, when sellers themselves choose buyers, concluding transactions under not-offsetting orders. “Those are two-sided deals at nonmarket prices”, emphasized Andrey Kashevarov. Among other violations he listed delays in considering requests of particular applicants and conclusions of transactions according to unmatched requests on a regular basis.

Summing up the meeting, experts decided to draft recommendations on competitive exchange trading with oil products and forward them to commodity exchanges. The meeting also made a decision that FAS Russia and the Federal Financial Market Service should jointly work on a possibility to form an inter-branch Council and formulate proposals towards improving the legislation regulating exchange trading.