The Russian Federal Service for Financial Markets (FSFM), known in Russian as the Федеральная служба по финансовым рынкам, was a regulatory authority tasked with overseeing the financial markets in Russia in 2004-2013. In English, it was sometimes also referred to as the Russian Financial Markets Federal Agency.
Established in 2004, the FSFM played a crucial role in regulating securities, the insurance market, and other financial institutions in Russia, aiming to ensure market stability and protect investors. It was disbanded in 2013 and its functions were taken over by the Central Bank of the Russian Federation.
Background
Contents
The FSFM was created as part of Russia’s broader effort to reform and modernize its financial sector following the economic turmoil of the 1990s. The agency was responsible for regulating and supervising activities within the financial markets, ensuring that market participants adhered to the law, and maintaining investor confidence.
Key Responsibilities
The FSFM had a wide range of responsibilities, including:
- Regulation of Securities Markets: The agency oversaw the issuance and trading of securities, ensuring that market participants followed the rules designed to maintain transparency and fairness. This included, among other things, the monitoring of issuers, stock exchanges, Russian brokers, investment funds, and their respective Self-Regulatory Organisations.
- Supervision of Insurance Markets: The FSFM regulated insurance companies, ensuring they operated within the legal framework and maintained financial stability. This was crucial in protecting policyholders and maintaining trust in the insurance industry.
- Monitoring Financial Institutions: Beyond securities and insurance, the FSFM also regulated other financial institutions, including pension funds and asset management companies, to safeguard investors and the broader financial system. In particular, they monitored the Russian Federation Pension Fund.
- Education: Another role for the FSFM was to increase the population´s understanding of securities laws and their practical application.
Headquarter and regional offices
The FSFM was headquartered in Moscow.
It had 13 regional authorities in other parts of the country, with offices in St. Petersburg, Ekaterinburg, Novosibirsk, Nizhny Novgorod, Rostov, Vladivostok, Krasnoyarsk, Oryol, Omsk, Samara, Chelyabinsk, Saratov and Irkutsk.
Structure
The FSFM was a part of the Russian Government.
The organisation contained thirteen departments and three independent divisions.
The respective responsabilities of the thirteen departments:
- Regulation and control over the collective investment.
- Regulation of financial market participants.
- Securities.
- Surveillance activities in the securities market.
- Financial market regulation.
- Information and monitoring of the financial market.
- Preliminary control of the insurance market.
- Economic analysis and control of the reliability of reporting by insurance companies.
- Insurance supervision and monitoring of solvency-restoration procedures.
- Legal.
- Administration and archives.
- Economics, finance and accounting.
- Information technology and economic support.
History of the FSFM
Creation
The FSFM was established by President Vladimir Putin’s Decree No. 314:, “On the System and Structure of Federal Executive Branch Agencies“, dated March 9, 2004.
Handing over of responsabilities from other governmental entities
In addition to new tasks, the FSFM also took over certain functions from existing governmental entities.
- The FSFM took over the functions of the former Federal Fund Market Commission of Russia (Федеральная комиссия по рынку ценных бумаг).
- The FSFM took over certain responsabilities from the Russian Ministry of Finance.
- The FSFM took over certain responsabilities from the former Ministry of Antitrust Policy of Russia.
- The FSFM took over certain responsabilities from the former Ministry of Labour and Social Development of Russia.
The Heads of the FSFM
The first Head of the FSFM was Oleg Vyugin, who held the position from March 23, 2004 to May 10, 2007. He was followed by Vladimir Milovidov from May 10, 2007, and Milovidov was in turn succeeded by Dmitry Pankin in 2011.
Transition to the Central Bank of Russia
On September 1, 2013, as part of a significant restructuring of financial regulation in Russia, the FSFM was dissolved by Presidential Decree number 645 25.7.2013, and its functions and responsibilities were transferred to the Central Bank of the Russian Federation.
This move was part of a broader effort to centralize financial regulation under one authority, streamlining oversight and enhancing the effectiveness of financial supervision.
The Central Bank of the Russian Federation now serves as the primary regulatory body overseeing all aspects of the financial system, from banking and insurance to securities and financial markets. The integration of the FSFM’s duties into the Central Bank was intended to improve the efficiency of regulation and strengthen the stability of the Russian financial markets.
Impact and Legacy
During its existence, the FSFM played a critical role in shaping Russia’s financial markets. It contributed to the development of a more regulated and transparent financial system, helping to rebuild investor confidence after the economic instability of the 1990s.
The agency’s dissolution and the transfer of its responsibilities to the Central Bank of the Russian Federation marked the beginning of a new era in financial regulation in the country. The Central Bank continues to build on the foundations laid by the FSFM, working to further stabilize and develop Russia’s financial markets.
The FSFM was an essential institution in the development of Russia’s modern financial system. Although it no longer exists, its legacy lives on through the regulatory frameworks and standards it helped establish.
The Central Bank of the Russian Federation
The Central Bank of the Russian Federation (Центральный банк Российской Федерации) was established in 1990. Its position is described in Article 75 in the Constitution of Russia.
Headquarter: It is headquartered on Neglinnaya Street in Moscow.
Alternative names: Bank of Russia (Банк России), Central Bank of Russia (CBR)