Navigate Up
Sign In
Plan for harmonizing EAEU countries’ legislation in financial sector to be considered before year-end

Plan for harmonizing EAEU countries’ legislation in financial sector to be considered before year-end

7/24/2020
The issues of implementing the Concept for forming a common financial market of the Eurasian Economic Union were discussed at the meeting of the Advisory Committee on Financial Markets under the Board of the Eurasian Economic Commission. The meeting chaired by Timur Zhaksylykov, Minister in charge of Economy and Financial Policy of the Commission, was held on July 23 at the EEC’s headquarters in Moscow.

"The Concept for forming a common financial market of the Eurasian Economic Union defines the legal framework for creating a common market of financial services, key directions for forming the common financial market infrastructure as well as mechanisms and tools that contribute to its expansion and further development," Timur Zhaksylykov noted.

The Concept provides for a standardized license mechanism to ensure a mutual access (commercial presence) in the form of subsidiaries for banks and insurance companies as financial service providers. Representatives of the parties' authorized bodies have discussed the work on a Standardized License Agreement being developed by the Bank of Russia. The Agreement will define the procedure and conditions for issuing and revoking (suspending) a standardized license, requirements to its applicant and procedure for revising.

The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has informed the meeting attendees about the progress of work on the Agreement on a supranational body for regulating the EAEU common financial market. Creating the supranational body is defined by the Treaty on the Eurasian Economic Union and the Concept for forming a common financial market.

"In accordance with the Agreement on harmonizing legislation of the Eurasian Economic Union in the field of financial market, entered into force on March 1, 2020, the Member States jointly with the EEC should develop within nine months a Plan for harmonizing legislation of the Union countries in the financial sector," the EEC Minister stressed.

Following the discussion, the Plan for harmonizing legislation of the EAEU Member ‑States in the financial sector (banking sector, insurance sector and sector of services in securities trading) was agreed. The Advisory Committee has decided to submit the issue of approving the Plan for the consideration by the EEC Board in October this year.

Harmonizing requirements for the financial market regulation will be based on the international principles of the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the International Organization of Securities Commissions, the Organization for Economic Cooperation and Development and considering the best international practices.

The meeting attendees have also discussed the draft Agreement on admitting brokers and dealers of one EAEU State to participate in on-exchange trading (trade organizers) on the other Member States' exchanges. The Agreement grants the right to national exchanges to recognize licenses of brokers and dealers issued by the authorized body of the EAEU State and enable them to participate directly in trading for concluding agreements for the sale and purchase of securities and derivative financial instruments.

Following the discussion the Advisory Committee has also decided to submit the draft Agreement on admitting brokers and dealers for the consideration by the EEC Board.

The Union States jointly with the Eurasian Economic Commission have developed a "road map" to build a common exchange space.

"The EAEU common exchange space will be formed as an interlinked system of exchange trading in securities and financial instruments in the organized markets of the Union countries combined on the basis of agreed procedures and technologies," Timur Zhaksylykov noted.

Implementing the "road map" for forming the EAEU common exchange space will ensure free movement of capital, goods and services, increasing mutual investment and investment attractiveness of the Member States' financial markets.

Following the exchange of views, the experts of the parties’ authorized bodies have decided to submit the draft "road map" for forming the common exchange space for the consideration by the EEC Board.

The meeting has also considered the interstate approval of the draft Agreement on the Advisory Council for Exchange Rate Policy of the EAEU Member States and the internal legal procedures required for signing the draft Agreement on coordinated approaches to regulating currency relations and taking liberalization measures.​