MOSCOW, July 14. /TASS/. Russian President Vladimir Putin signed a law aimed at developing the mechanism of public placement of securities on the Russian financial market. The document was published on the official portal of legal information on Thursday.
In European countries an integral part of the IPO/SPO mechanism (primary/secondary public offering of shares - TASS) is the institution of price stabilization - maintaining the price of placed securities for a certain limited period of time from the date of placement in order to form a fair market price during the placement of securities, as well as reducing pressure on their price due to an oversupply for the sale of such securities.
The law proceeds from the fact that stabilization is carried out by trading participants, who can perform transactions on their own behalf and at their own expense, as well as on their own behalf and at the expense of the clients, if there are relevant instructions from them. Maintaining prices in connection with the placement and circulation of securities at the expense of customers is attractive for issuers (organizations issuing securities - TASS), since international investors also take part in IPO/SPO, according to the accompanying files to the document.
According to the law, the actions of the trading participant's client are not market manipulation if such actions, as well as the actions of the trading participant, committed on behalf of the client, are aimed at maintaining prices or demand for securities in connection with the placement and circulation of securities. As the explanatory note states that in terms of their mechanism such actions to stabilize the market are similar to those that are carried out in order to manipulate the market. The latter is a gross violation in the financial market, "negatively affecting its attractiveness."
For this reason, stabilization actions of clients can be differentiated from the actions of market manipulation only if the requirements for such activities are established.
"In this regard, the competence of the Bank of Russia to establish the procedure and conditions for maintaining the parameters of exchange trading in order to recognize it as bona fide is supplemented by a similar competence of the Bank of Russia in relation to stabilization carried out with the participation of a client - a trading participant," the explanatory note says.
The law provides that the Bank of Russia establishes specific conditions for maintaining prices and demand for securities (for example, the duration of stabilization, the price level at which stabilization is carried out, the requirements for marking customer orders submitted in fulfillment of stabilization obligations), as well as the procedure for conducting stabilization. The norms of the law "are able to have a generally positive impact on the development of the Russian financial market, creating favorable conditions for the entry of more companies into the market and providing additional protection for the rights of investors as part of the placement of securities," the accompanying documents say.