Anatoly Aksakov, a deputy chairman of the State Duma's committee for credit institutions and financial markets, told a news conference in Moscow that Russia had created a legal framework conducive to IPOs in the country. In particular, he said parliament had amended laws on the securities market, joint stock companies and on protecting institutional investors' rights. Therefore, Russia has brought its legislation close to international standards, Aksakov said.
Speaking at the same news conference, Oleg Vyugin, the head of the Federal Service for Financial Markets, said the opportunity to hold IPOs in Russia in compliance with international standards had only emerged at the start of this year. "Now companies can hold initial public offerings of their shares in accordance with international standards," he said.
Vyugin said the only restriction for IPOs on the Russian market was the requirement for companies to float at least 30% of their initial issue in the form of local shares. "The 30% requirement is $0.5 billion at best and does not create a problem for large companies," Vyugin said.
Vyugin said the requirement had been introduced to encourage issuers to develop effective legal and financial schemes for local shares placements. "This restriction will be subsequently lifted and will not discredit investors because they can place 70% of their issue in depositary receipts," Vyugin said.
Russian companies are generally thought to be heavily undercapitalized and in need of raising their market capitalization to face increasing competition from Western companies.
