OREANDA-NEWS. August 12, 2014. The Agency of the Republic of Kazakhstan for Competition Protection organized a meeting on exchange trading and market pricing in Astana.

The Republic of Kazakhstan was represented by the Agency Chairman, G. Ozarbakov, and his Deputy T. Baimukhanov; Deputy Minister for Economy and Budget Planning, М. Аbylkasymova; Deputy Chairman of the Board of the National Chamber of Entrepreneurs, G. Kurbanbaeva; as well as representatives of exchanges, the authorities and business community of the Republic of Kazakhstan.

The Russian Federation, along with Deputy Head of FAS, Anatoly Golomolzin, was represented by “SPIMAX” President, A. Rybnikov and his advisor S. Kvartalnov; a member of SPIMAX Board, A. Karpov and the Head of “LUKOIL” Department for Forecasting and Market Conditions, А. Kiryushin.

As Galym Ozarbakov pointed out at the beginning of the meeting, developing exchange trading is one of important issues for the Republic of Kazakhstan. Analysis of the market for the services on organizing exchange trading as well as positive experience of other countries, for instance, Russia, shows the need to develop this institution. Anatoly Golomolzin gave a detailed account of Russian experience.

In the report on “Exchange Trading with Oil and Oil Products”, he covered the issues of the structure of the oil market in the Russian Federation in 2008-2013, dynamics of the indices of exchange prices and prices for off-exchange transactions with oil products, the taxation policy on these markets, monitoring the state of wholesale and retail markets of oil products markets and price levels in the regions, as well as exchange transactions. Anatoly Golomolzin talked in more detail about the issues concerning exchange trading (particularly, establishing legal framework in this filed and enforcement), and registering off-exchange contracts:

- An impact of requirements for registering off-exchange transactions upon the level of prices for oil, oil products, coal and grain

- The procedures for FAS together with the Ministry of Energy of the Russian Federation to determine the lowest amount of oil products mandatory for sale through exchange

- A reaction of economic entities dominating the market of oil products to the introduction of an obligation to sell particular volume of produced / sold oil products through exchange

- Possibility to form a model of inter-exchange market of the member-states of the Common Economic Space (CES) and harmonizing the national laws on exchange trade

- Possibility to conduct a joint investigation on the issues of exchange trading under the framework of the Interstate Council on Antimonopoly Policy (ICAP).

Elmira Nurkisheva, Deputy Director of the Department for Analyzing Fuel-and-Energy Complex, Financial Markets and Other Industries, of the Agency of the Republic of Kazakhstan for Competition Protection, outlined the problems exposed on the market of organizing exchange trading in Kazakhstan. The first problem is a limited List of exchange goods, comprising wheat, potatoes, coal, soya beans, etc. (Russia does not have such restrictions). To resolve the issue it is proposed to add other grains, oil products, ores, construction materials, etc., to the List. Extending the List, in particular, can increase public procurement of exchange products.

The second issue is avoiding exchange sale of goods by splitting lots into several lots smaller that the lowest size specified in the List. The third issue – transactions for sale of exchange goods that take place by-passing commodity exchanges.

Participants also discussed development of exchange trading within the Eurasian Economic Space. In particular, they emphasized the importance of establishing transparent market price indices of oil and oil products, including the Eurasian Economic Space. It was also decided to organize working meetings in order to further discuss development of exchange trading, establishing exchange and off-exchange market on comparable foreign markets of oil and oil products. Upon the outcome of the meeting, it is also planned to consider possibility of representatives from Kazakhstan taking part in the work of the Exchange Committee that is being established in the Russian Federation.

The parties also agreed that representatives of Kazakhstan antimonopoly authority would take part in FAS Expert Councils for protecting competition on the markets of financial services, gas markets, developing exchange trading with natural gas and establishing market price indices for exchange and off-exchange markets. Next meeting is scheduled for September 2014.

Overall, the parties emphasized the importance of bilateral cooperation in this field and expressed their readiness to continue joint efforts.