FEDERAL COMMISSION ON THE SECURITIES MARKET

The Federal Commission for the Securities Market (FCSM of Russia) regulates the securities market in Russia. State regulation of the securities market ensures the implementation and protection of the rights of investors and the freedom of activity of market participants within the framework of the rules provided for by the legislative and regulatory framework. As a federal executive body, the FCSM of Russia pursues state policy in the field of development of the securities market, controls the activities of issuers and market participants and ensures the disclosure of information on the securities market.

Currently, the commission's focus is on improving the corporate governance standards of Russian companies, facilitating their transition to international financial reporting standards, developing the institution of collective investments, in particular mutual investment funds, and optimizing the taxation of investors and market participants. One of the important areas of activity for the FCSM of Russia today is the implementation of pension reform and ensuring the safety and protection of funds that will be transferred under the management of management companies selected through a competition.

Development of the legislative and regulatory framework for the securities market is one of the main activities of the Federal Commission for the Securities Market of Russia. The Commission has developed amendments to the law “On the Securities Market”, to the Criminal Code and the Code of Administrative Violations, aimed at suppressing price manipulation and the use of insider information.

Main activities:

• development of main directions for the development of the Russian securities market;
• licensing and control over the activities of professional participants in the securities market (brokers, dealers, management companies, clearing organizations, depositories, registrars, organizers of trading on the securities market, including stock exchanges), investment funds, management companies and special depositories of investment funds, mutual funds and non-state pension funds; issuing permits for activities of self-regulatory organizations (SROs) of professional participants in the securities market and supervision of their activities; control over compliance by issuers with legislative and other legal acts on securities;
• certification of managers and employees of professional participants in the securities market;
• registration of issues and reports on the results of issuance of securities and prospectuses of securities;
• ensuring disclosure of information on the securities market;
• development of the legislative and regulatory framework for the securities market: bills; rules for carrying out professional activities with securities; issuance standards and the procedure for registering the issue of issue-grade securities; mandatory requirements for transactions with securities, etc.

The powers of the Federal Securities Commission of Russia do not extend to the procedure for issuing debt obligations of the Government of the Russian Federation and securities of constituent entities of the Russian Federation. This falls under the jurisdiction of the Ministry of Finance of the Russian Federation.

Resolutions of the Federal Securities Commission of Russia are subject to mandatory publication, come into force on the date of their official publication and are subject to state registration in the prescribed manner.

Composition of the Federal Securities Commission of Russia:

There are 11 members of the Federal Securities Commission of Russia.

Chairman of the Federal Securities Commission of Russia Igor Vladimirovich Kostikov has the status of a federal minister and was appointed to the position by Decree of the Acting President of the Russian Federation V.V. Putin dated February 1, 2000 No. 297.

The FCSM of Russia includes:

Kolesnikov Gennady Isaakovich – first deputy chairman;
Zuev Konstantin Eduardovich – State Secretary – Deputy Chairman;
Kataeva Elena Georgievna – deputy chairman;
Nadezhda Nikolaevna Zakharova – Secretary of the Federal Securities Commission of Russia;
Glazunov Dmitry Anatolyevich – member of the Federal Commission for the Securities Market of Russia;
Pleshakov Alexander Vladimirovich – member of the Federal Commission for the Securities Market of Russia;
Sharonov Alexey Vladimirovich – member of the Federal Commission for the Securities Market of Russia;
Kharlamov Sergey Konstantinovich – member of the Federal Commission for the Securities Market of Russia;
Profatilov Sergey Nikolaevich – member of the Federal Commission for the Securities Market of Russia.

Structure of the bodies of the Federal Securities Commission of Russia

Within the framework of the Central Office of the Federal Securities Commission of Russia, the following departments operate, organized in accordance with the main areas of activity of the Commission:

• management of financial information and reporting methodology;
• management of control over transactions with securities;
• Department for regulating the activities of professional participants in the securities market;
• department for regulation of issue and circulation of equity securities;
• department of interaction with regions;
• Department for regulating the activities of registrars, depositories and clearing organizations;
• Department for regulation of investment activities in the securities market;
• management of interaction with self-regulatory organizations of professional securities market participants and investors;
• legal management;
• educational and methodological management;
• external relations department;
• business management;
• accounting department;

14 regional branches (RO FCSM of Russia)

Regional branches of the commission are formed by a decision of the Federal Securities Commission of Russia in agreement with the executive authorities of the constituent entities of the Russian Federation and act on the basis of regulations approved by the commission. ROs ensure compliance with the norms, rules and conditions for the functioning of the stock market established by the legislation of the Russian Federation, practical implementation of decisions taken by the Federal Securities Commission of Russia and control over the activities of professional participants in the securities market. Currently, ROs operate in the following cities: Moscow, St. Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, Rostov, Vladivostok, Krasnoyarsk, Orel, Omsk, Samara, Chelyabinsk, Saratov, Irkutsk.

Board of the Federal Securities Commission of Russia

The board of the FCSM of Russia consists of 15 people. The board includes the chairman of the FCSM of Russia, the first deputy and three deputy chairmen of the FCSM of Russia, the secretary of the FCSM of Russia, five representatives of federal executive authorities, including, without fail, a representative of the Ministry of Finance of the Russian Federation, a representative of the Central Bank of the Russian Federation, the chairman of the expert council of the FCSM of Russia, representatives of the chambers of the Federal Assembly of the Russian Federation. The board approves the regulations for the work and activities of the expert council.

Expert Council under the Federal Securities Commission of Russia

A permanent consultative and advisory body, an expert council, has been created under the Federal Securities Commission of Russia. The council includes representatives of the Administration of the President of the Russian Federation, the Ministry of Finance of the Russian Federation, the Ministry of Internal Affairs of the Russian Federation, the State Committee of the Russian Federation for State Property Management, the Ministry of Taxes and Duties of the Russian Federation, the Central Bank of the Russian Federation and the Russian Federal Property Fund, as well as representatives of professional participants in the securities market securities, SROs of professional participants in the securities market, their unions, associations and other public associations, independent experts.

The Expert Council carries out preparation and preliminary consideration of issues related to the exercise of powers of the FCSM of Russia, develops proposals on the main areas of regulation of the securities market, and considers draft resolutions of the FCSM of Russia.

History of creation

The Federal Securities Commission of Russia has existed in various statuses since 1993. In accordance with the Order of the President of the Russian Federation No. 163-rp dated March 9, 1993 “On the Securities and Stock Exchange Commission under the President of the Russian Federation,” the Securities and Stock Exchange Commission under the President of the Russian Federation was formed.

By Decree of the President of the Russian Federation dated July 1, 1996 No. 1009 “On the Federal Commission for the Securities Market,” the commission was transformed into the Federal Commission for the Securities Market.

The functions and powers of the FCSM of Russia are determined by the Federal Law of April 22, 1996 No. 39-FZ “On the Securities Market”, decrees of the President of the Russian Federation, decrees of the Government of the Russian Federation and the corresponding Regulations on the Federal Commission for the Securities Market.

Decree of the President of the Russian Federation dated April 3, 2000 No. 620 “Issues of the Federal Commission for the Securities Market” approved a new edition of the Regulations on the Federal Commission for the Securities Market and brought it into compliance with the current legislation of the Russian Federation. The new edition of the Regulations defines the functions of the Federal Securities Commission of Russia in regulating the securities market and confirms its status as a federal body responsible for implementing state policy in the field of protecting the rights of investors.

securities and exchange commission

SEC

(SECURITIES AND EXCHANGE COMMISSION). The federal agency established by the Securities Exchange Act of 1934, which began operation on July 2, 1934, to administer the provisions of that act and the SECURITIES ACT of 1933, which was previously administered by the Federal Trade Commission. In addition to these acts, the SEC is also responsible for implementing the Public Utilities Holding Company Act of 1935, the Trust Contract Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Investor Protection Act of 1970 and the Foreign Bribery Act of 1977. The Commission also assists district courts in FCRA reorganization cases and excludes International Bank for Reconstruction and Development securities from registration requirements (Section 15 Bretton Woods Agreements 1945) and certifies that a particular investment company is not subject to taxation in connection with the financial. Development Corporation (Section 851(e) of the Internal Revenue Code of 1954) The SEC has three primary missions: enforcing the principle of disclosure by issuers in public offerings of securities, initiating legal proceedings when fraud is discovered, and registering securities offered to the general public. investors. The SEC oversees compliance with federal securities laws, the purpose of which is to provide information and protect investors, create conditions for the market to be fair and transparent and, if necessary, enforce these laws through sanctions. The exclusive functions of the commission include: monitoring that complete and objective information is provided in registration applications, prospectuses, proxy voting documents, and annual reports of issuers and stock exchanges; regulation of securities markets; regulation of mutual funds and other investment companies; regulation of holding companies and utility companies; regulation of investment advisers; reorganization of bankrupt corporations under Chapter 11 of the Bankruptcy Code (11 U.S.C. 1109); representing holders of debt securities under the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-77bbbb); implementing laws through sanctions. By their nature, the decisions made by the commission are semi-official: their implementation is carried out only by the judiciary. The commission consists of five members, of which no more than three can be representatives of one political party. They are appointed by the President (with the consent of the Senate) for five years. The term of office of one member expires annually. The Chairman is appointed by the President (Sec. 3, Reorg (Sec. 3, Reorganization Plan 10 of 1950). The structure of the SEC is shown in the attached diagram. The crisis in the securities market in 1967-1969, caused mainly by the failure to deliver securities on a timely basis, led to the creation in December 1970 of a special organization, INVESTOR PROTECTION CORPORATION, to protect investors from bankruptcies of brokerage firms.Development of a national securities market.The 1975 amendments to the Securities Laws directed the SEC to create a national securities trading system and a nationwide settlement and clearing system. Since then, the SEC has not stopped working on their creation. Since the beginning of 1982, an electronic system has been operating, uniting seven stock exchanges and the over-the-counter market into a single network. At first, it included only 30 shares. Another step towards creating a national The 1975 amendments (Section 17A) also extended the SEC's regulatory authority to securities settlement transactions to facilitate rapid and accurate clearing and settlement of transactions with securities. Clearing organizations must register with the SEC and submit regular reports on their activities to the SEC, which, in turn, checks whether the rules of these clearing organizations comply with the law. The powers to control clearing institutions, the role of which is mainly performed by banks, according to the 1975 Amendments, are delegated to the relevant banking regulatory body. Power to make rules regarding the storage of money. funds and securities clearing institutions banks are divided between the commission and the appropriate banking regulatory authority. The Securities Exchange Act was also amended in 1975, which required securities transfer agents other than banks to register with the SEC. Bank transfer agents are required to register with the relevant banking regulatory organization. The SEC has broad authority to impose regulations on all aspects of the activities of transfer agents. However, as with clearing institutions, if the transfer agent is a bank, the relevant banking regulatory agency has control and sanctioning powers and the authority to make rules regarding the safekeeping of funds. funds and securities by the transfer agent bank are divided between the commission and the appropriate bank regulatory authority. Section 17 A(e) of the amendments also tasked the SEC with eliminating the physical movement of stock certificates in a securities settlement. In addition, the commission was directed, under Section 12(m), to examine the practice of registering securities in a `street name', i.e., in the name of a nominee as opposed to the actual owner of the securities receiving the income, and report the findings Congressional investigations. Municipal securities. Section 15B of the 1975 Amendments introduced a registration requirement for brokers, dealers, and banks regularly engaged in the purchase, sale, and other transactions in municipal securities (excluding trust transactions). However, issuers of municipal securities continue to be exempt from the registration requirements of the securities laws. A special Council has been created to regulate the activities of brokers and dealers involved in transactions in municipal securities. The SEC has the authority to approve, repeal, or amend any rules submitted by the board. Under Sections 10(b)b 15(c) of the Securities Exchange Act, the SEC may intervene directly if it detects deception or fraud. However, the board does not have any authority to audit or enforce its rules. This is the statutory duty of the NATIONAL ASSOCIATION OF STOCK DEALERS with respect to its member firms (Secs. 15A(b)(7) and 15B(c)(7). Similarly, in the case of banks as municipal securities dealers, this duty falls on appropriate banking regulatory authority (Secs. 15B(c)(5) and 17(b). Proxy (shareholder voting proxy). The SEC regulates proxy voting. A proxy is a document given to a shareholder to exercise his or her rights, in which includes: election of directors, changes in the charter of a corporation, appointment of an independent auditor, issuance of securities, etc. Proxies are usually used when voting at annual meetings of shareholders. Proxies are used not only by the board of directors, but also by individual shareholders or a group of shareholders. The SEC has established a number of rules for actions in in the event that shareholder proposals conflict with the position of the board of directors. 1. The proposer must have the right to vote. 2. The proposer or his representative must be present in person at the annual meeting to present his proposal. 3. The proposal itself must be received at least 90 days before the proxies themselves are sent out.4. The proposal should not resemble a similar proposal that was rejected in the previous five years. Accountants. Accountants deal with the corporate finance department and the SEC's Office of the Chief Accountant. The main responsibility of the Corporate Finance Department is to ensure that the financial the information provided to the public in connection with the sale of securities was complete and not misleading. The Chief Accountant acts as the Commission's chief consultant on accounting and auditing issues. Rule S-X (Form and Contents of Financial Statements), accounting publications, and the recently launched series of financial publications. reporting, here are the main documents that disclose the form, content and methods used in providing information to the SEC. Although the SEC has its own rules and procedures, it allows private companies to use `generally accepted accounting principles.' Bank Accounting and Reporting. The Securities Act of 1933 requires that securities offered for public offering be registered with the Commission. The Securities Exchange Act of 1934 requires public companies to comply with rules set by the Financial Disclosure Commission. information in the following areas: registration of classes of securities, regular reporting, distribution of proxies and documents with an offer to purchase shares. The Commission's authority in these matters extends to holding companies that own banks and savings and loan associations. Securities issued directly by depository institutions are generally exempt from registration under the Securities Act. Currently there are approximately 1000 banks and approx. 70 savings and loan holding companies submit reports to the Commission. Approximately 400 banks submit securities reports to three bank regulators, which are responsible for examining them. Section 12(i) requires banking regulators to have their regulations `generally similar' to the Commission's Regulations. In general, the Commission specifies the accounting principles and other requirements to be followed in the preparation of securities reports by public banks that are members Federal Deposit Insurance Corporation. Banking regulators require depository institutions to comply with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) for most transactions. SEC Rule S-X provides that reports made in violation of GAAP are considered misleading. Fin. GAAP and auditor-certified reports form the basis of all issuer disclosures to investors. Banking regulatory authorities do not require mandatory confirmation of financial information. bank reports by an independent auditor. The Federal Reserve Board requires independent auditor certification only for bank holding companies with total assets equal to or greater than $150 million. Under federal securities laws, the SEC has the authority to investigate and take enforcement action when laws are violated. , which involves deception committed by a bank, bank holding company or related entities. The Commission has in its arsenal the following tools to influence violators of federal securities laws: petition for an injunction; administrative measures requiring compliance with the conditions of the law on reporting; disciplinary actions against professional participants, including accountants and auditors; restrictions on professional activities in the securities market. Since 1981, the Commission has taken 15 disciplinary and other actions against banking institutions due to insufficient reserves for loan losses, provision of incorrect or misleading information regarding financial matters. position and performance, exaggeration of profits and loans, fraud, and various reporting violations. To ensure full disclosure of information to investors through the materials submitted to it, the Commission has adopted certain reporting standards for bank holding companies, which complement the GAAP standards :1. Article 9 of the Code of Practice S-X prescribes a certain form and content of finance. reports for bank holding companies when submitting documents to the commission. Article 9 requires disclosure of information in connection with foreign transactions.2. It is required to provide information on the structure of assets, liabilities and share capital, information on the structure of the investment portfolio, the structure of loans (broken down by industry and volume), the degree of concentration of loans from foreign borrowers, the sensitivity of assets and liabilities to changes in the interest rate, risk factors and losses incurred in connection with loan operations.3. Accounting Bulletins Nos. 49 and 49A provide for the disclosure by bank holding companies of information about loans to foreigners. to the government who have problems with liquidity. They also contain clarifications on how additional information should be provided on the restructuring of existing debts abroad, the financing of additional borrowings, etc.4. Accounting Bulletin No. 50 describes how information should be reported in connection with the formation of a holding company with one bank.5. Bulletin No. 56 published the point of view of the commission staff regarding the disclosure of information on allocated reserves for insurance against risks associated with the transfer of securities, which are required to be held at the direction of banking regulatory and supervisory authorities. CODE OF RULES S-X, as well as special publications establish accounting principles , which should be followed when preparing financial statements. reporting to the commission. Accounting bulletins contain additional clarification. S-K CODE OF RULES details the rules for including non-financial information in registration statements, annual reports and proxies. character. This includes a description of controversial and analytical issues related to the management of the company, disagreements with accountants, necessary information about new issues of shares. Special financial. issues contain additions or innovations important to financial compilers. reports and other documents, and other information affecting audit activities and auditing standards. The Accounting and Auditing Special Issues contain a description of the SEC's sanctions against accountants. These releases include descriptions and texts of the commission's hearings. In 1980, the SEC began a project designed to reduce duplication of submissions to the Commission by harmonizing disclosure requirements. The SEC has adopted a standard list of financial information included in the annual report, and then made a reservation that when drawing up other documents it is enough to make a reference to the relevant section of the annual report. In addition, the Commission developed the so-called. a basic information package that includes the most important information investors need to assess the risk associated with investing in a given company's securities. This package distinguishes between five classes of basic information: market prices and dividends on common shares; information characterizing the financial situation over the past five years; assessment and analysis by financial managers. position and performance results; audited financial statements. reports and related information; etc. information (brief description of activities, characteristics of operations and management, special information required from such specific industries as banking and insurance). Additional periodic reporting includes the following documents. FORM 10-K includes financial reports, graphs, tables, descriptions of issues on which security holders will have to vote. Form 10-Q is a quarterly report. It is filed within 45 days after the end of each quarter, except the fourth, when the annual report is filed on Form 10-K. Form 8-K is used to disclose information of an unexpected nature: a change in control of the issuer, the acquisition or sale of a significant part of the assets, bankruptcy or takeover of the issuer, change of auditors of the issuer, change of directors of the issuer, etc. information that may be important to investors .The Securities Exchange Act of 1934 established a limited degree of legal responsibility of accountants in connection with their participation in the preparation and presentation of periodic reports. They bear civil liability for providing false or misleading information. The SEC enforces the filing and reporting of information through an electronic data collection, analysis, and retrieval system known as EDGAR (Electronic Data Gathering, Analysis and Retrieval). This system allows firms to transmit information to the SEC through electronic communications channels, which improves the transfer of information and makes it more efficient. Reorganization of corporations. Chapter 11 of the Bankruptcy Code gives the SEC the right to participate in any reorganization case and present its views on any issue. Chapter 11 applies to all types of business reorganizations. The commission is usually limited to participation in large cases related to the protection of investor interests. It can provide its views on whether the processes associated with the reorganization are accurately reflected in the submitted reports and be directly involved in the application of sanctions if necessary. Plans of reorganization often involve the debtor issuing new securities that are not required to be registered (under Section 6 of the Securities Act of 1933).

Securities and Exchange Commission – English Securities and Exchange Commission, SEC, a government commission created by the US Congress to regulate the securities market to protect investors. In addition to its regulatory and advocacy functions, it also oversees corporate acquisitions in the United States. The Securities and Exchange Commission consists of five commissioners appointed by the President of the United States and confirmed by the Senate. The statutes that govern the commission are designed to promote full disclosure and protect the public and investors from fraudulent and manipulative practices in the securities markets. Most issues of securities offered for trading throughout the United States, either through the mail or on the Internet, must be registered with the Securities and Exchange Commission.

For example, the commission's authority is that if someone buys more than 5% of a company's equity, they must report it to the Securities and Exchange Commission within 10 days of the purchase because it raises a takeover threat. falls under the jurisdiction of the commission.

Cyprus Securities and Exchange Commission ( CySec) is the state supervisory authority of investment and foreign exchange organizations in the Republic of Cyprus. Given the fact that the state is a full member of the European Union, CySec operates according to European standards for the supervision of firms engaged in financial and foreign exchange transactions.

When was CySec created?

The history of CySec is more than ten years of activity in the field of regulation of brokers on the stock exchange. The body was created in 2001. Initially, the body was supposed to control the activities of stock exchange entities in principle, but gradually the scope of activity narrowed to the issuance of licensing documents and further control over brokers.

In 2004, a significant event occurred in the history of the organ. As a result of the republic's accession to the European Union, the commission expanded its influence over the entire community. For the previous three years, the authority had exclusively domestic jurisdiction.

Scope of activity CySec

As indicated above, the main sector of the commission’s activity is the issuance of licenses to brokers and control over their activities. Additional areas include the following:

• Control over the entry of securities on the stock exchange, their analysis and evaluation.
• Supervision of compliance with regulations governing activity on the stock exchange and the activities of brokers.
• Analysis of the results of daily operations on the stock exchange.
• Certification of top managers of investment companies.
• Application of fines to violators of the law.

It is worth noting that CySec has influence on market participants and can apply disciplinary and administrative sanctions to them.

This is explained by the fact that this commission is a non-profit, but a state structure that can use instruments of state coercion.

Which entities does the commission control?

• — Investment firms of Cyprus.
• — Branches of national investment firms and representative offices of investment firms from the European Union in the country.
• — Representative offices of Cypriot companies abroad.
• — Open-ended investment funds that comply with EU parameters.
• — Managers of the above-mentioned funds.
• — Representatives of investment funds and their branches, both nationally registered and foreign (in the European Union).
• — Trust and fiduciary funds.
• — Investment organizations with variable capital.
• — Dealing companies.

These financial exchange entities are required to comply with the law and CySec requirements.

Commission structure

The commission's membership council consists of five people. The commission also has three non-executive members.

Members of the commission board work on a permanent basis as civil servants. They are appointed by the Council of Ministers of Cyprus at the proposal of the Minister of Finance of the Republic for a five-year term. A member of the commission may be re-elected.

The commission itself consists of nine departments and divisions, which are divided by functional purpose (Department of Control, Department of Licensing, Department of International Relations, and so on).

Goals and vision of stock exchange management from CySec

The main goal of the organization is “to protect the investor and ensure the stable development of a fair market.” The organization's goal is to transform the Cyprus stock market into one of the most reliable and attractive investments.

Investor protection

An investor who has been defrauded by a broker may file a claim against a CySec-regulated entity. In this case, claims are divided into two types:

• Against the Cyprus Investment Fund, its representative offices and branches.
• Against a body not controlled by CySec.

If the first claim is a lever for full-fledged proceedings and intervention of the commission to apply sanctions, then the second claim does not provide for the participation of CySec in protecting the rights of the investor.

When participating in the trading of a fund not controlled by CySec, an investor can file such a claim only to be referred to a court of general jurisdiction through the authorities of CySec. In this case, the latter will not take part in the proceedings, and sanctions will be applied in accordance with the national legislation of Cyprus.

CySec reporting

Every year the commission reports on its work to the Minister of Finance of Cyprus. The document displays the results of CySec's activities, namely:

• Market changes, trends.
• Offenses on the stock exchange, results of investigation and application of sanctions.
• Investor protection.

Issuance of CySec licenses

A license from CySec is a guarantee of broker reliability and investor protection.

In order to receive the document, the company representative must appear in Cyprus in person and provide a development plan for the brokerage company and reports on previous activities. A necessary condition for obtaining a license is also a guarantee deposit to the bank.

In addition, CySec will check the availability of sufficient staff and analyze the company’s income.

Additionally, you will need documents such as the company's charter and main policy directions.

CySec sanctions

The main offenses under the jurisdiction of CySec are:

• Confidential information on transactions.
• Inconsistency with the activity program.
• Failure to comply with reporting.
• Delayed payments.

For each of the above crimes, a fine of 5,000 euros is provided. The total number of possible offenses is six. Using simple calculations, we get more than 36,000 for a one-time violation of all norms. A considerable amount even for a large broker.

In case of constant failure to comply with the laws and requirements of the Securities and Stock Exchange Commission, the controlled entity risks losing its brokerage license from CySec. In this case, re-licensing can become quite problematic.