SRO Head and His/Her Business Reputation

From 20 to 27 November 2015, the Bank of Russia welcomes expert opinions on the Draft  Ordinance ‘On Fit and Proper Requirements for Candidates for the Head of the Self-regulatory Organisation in Financial Markets’ developed in compliance with Clause 4 of Part 3 of Article 24 of Federal Law No. 223-FZ, dated 13 July 2015, ‘On Self-regulatory Organisations in  Financial Markets and Amending Articles 2 and 6 of the Federal Law ‘On Amending Certain Laws of the Russian Federation’.  The Law will come into effect on 11 January 2016.

According to the draft ordinance, citizens convicted of a legal entity bankruptcy cannot be nominated candidates for this position. Moreover, if a court of law recognises the fact of deliberate and (or) fictitious bankruptcy of a financial organisation, where the candidate executed the functions of a head, member of the board of directors, inspector, internal auditor, or chief accountant, this candidate will not be able to hold a position of SRO head.

A candidate may aspire to head a SRO if he/she is not disqualified or his/her qualification certificate of a financial market specialist is not cancelled. Provision by the candidate of unreliable data concerning qualification and business reputation requirements may also prevent him/her from being approved as SRO head.

The candidate will not be allowed to head a SRO in case of illegal use of insider information, market manipulation, and also application against the financial organisation, where the candidate was engaged in compiling and submitting financial statements (i.e. executed the functions of a head or chief accountant), of measures stipulated by federal laws for providing essentially unreliable statements.