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Andrey Bougrov, Senior Vice President of MMC Norilsk Nickel and board member of the RSPP, chaired a joint meeting of the RSPP’s Committee on Corporate Relations and the National Council on Corporate Governance (NSKU) Working Group on Improving Corporate Law. Participants discussed the draft bill «On Amendments to the Federal Law ‘On Countering the Illegal Use of Insider Information and Market Manipulation and on Amending Certain Legislative Acts of the Russian Federation’.»

The draft bill passed the first reading in the State Duma in 2016 and is currently being readied by experts, including from the Central Bank of Russia, to be submitted for the second reading. Mr. Sergey Shvetsov, First Deputy Governor of the Central Bank, and Mr. Valery Lyakh, Director of the Central Bank’s Department on Fighting Bad-Faith Practices presented the main tenets of the new bill.

The bill proposes to significantly change the approach to regulating the use of insider information. The main purpose of the changes, according to the bill’s sponsors, is to improve regulatory effectiveness in cases of bad-faith use of insider information and to streamline the administrative burden on market participants who must implement measures to counter the illegal use of insider information. The bill spells out the audit procedure of legal persons and the liability of the Central Bank staff should they disclose confidential information obtained during audits.

Corporate members stated that the bill’s criteria for what is considered insider information are subjective, and that it is very likely that differences will arise in the interpretation of those criteria depending on who (issuer, insider at the issuer’s, an oversight authority) is making the determination as to whether the criteria for insider information are met. Thus, it may be difficult to correctly implement the mechanism for compiling lists of, and identifying individuals with access to data that, while not featured in the directory of insider information, may be considered such based on the criteria.

Discussion participants included directors of compliance and legal departments from major banks and companies, including Lukoil, VTB Bank, MMC Norilsk Nickel, TMK, Inter RAO, Surgutneftegas, Moscow Exchange, IC RUSS-INVEST, Prosperity Capital Management, NIU VSHE, Financial University and Interfax Agency, and experts from the Forum think tank. The discussion will feed into the RSPP’s white paper on the topic to be submitted for discussion to the Central Bank of Russia and the State Duma.