Russian Capital Markets

1. Governing regulations

Western-style regulation of banking and finance, including the asset management has gradually been developed in Russia during the past five years. Presently, in addition to certain laws, various rules and regulations, including government resolutions, presidential decrees and regulations of the Federal Commission on Securities and Capital Markets (hereinafter, the "Federal Commission") regulate the Russian market. It appears that the regulation of the Russian financial markets has not yet reached the level of predictability familiar in Western Europe and, therefore, it can be expected that the amendment of the laws, rules and regulations will continue in the future.