Beginning Steps in Changing the Framework of Financial Markets in Russia : The Importance of Amendments on the Federal Law on Joint-Stock Companies

One of the most important steps the Russian Federation has taken was passing the Federal Law on Amendments to the Legal Acts of Russian Federation and Cancellation of Certain Legal Acts (hereinafter: Amendments to the Legal Acts) on December 29, 2012. The Amendments to the Legal Acts have made slight changes to three key existing laws, the Federal Law on Securities Market, the Federal Law on Joint Stock Companies, and the Federal Law on Banks and Banking Activities. Some of the most significant changes have been made to the Federal Law on Joint Stock Companies. The main goal of the Amendments to the Legal Acts is to improve the regulation and issuance of securities. All amendments will be put in effect by January 1, 2014, but implementation of amendments began as early as January 2, 2013. Although the changes to the law may seem slight, these changes seem to be only a showcase for future shifts in the regulatory regime and possible future changes to fix major structural issues. The amendments will have the impact of increasing stockholders' rights, implementing a new dividend payment system, and requiring many new administrative policies to streamline certain processes and create efficiency. These new changes might be the beginning steps Russia needs to increase the flow of some much-needed investment and make cities, like Moscow, important global financial hubs. This note will discuss the Amendments to the Legal Acts by explaining: (1) the Russian market and Russia's goals of becoming a financial powerhouse; (2) the characteristics of The Amendments to the Legal Acts; (3) details of The Federal Law on Joint-Stock Companies and the changes made by the Amendments to the Legal Changing the Framework of Financial Markets in Russia 521 Acts; (4) the effects of the changes to The Federal Law on Joint-Stock Companies