On revocation of licences of securities market professional member

The Bank of Russia took a decision to revoke depositary, broker, dealer and securities management licences issued to the professional member of the securities market Finance Capital Group LLC (referred to as ‘Company’ hereinafter).

The grounds to take the decision were repeated annual violations of Russian legislation on securities including violations of federal authority regulations governing the securities market as well as legislation to counter the legalization (laundering) of criminally obtained incomes and financing the terrorism, namely:

Company repeatedly failed to provide possibilities to exercise supervisory powers;

Company did not perform assets and securities reconciliations;

The registration log of clients’ instructions had numbers at odds with the numbering system;

Internal accounting ledgers did not provide for a possibility to categorise data by transactions including the type of professional activity underway in the securities market, type and category of the securities, trading in futures and options, by issuers, securities market trade organisers, over-the-counter transactions, each client, professional member’s branch, transaction times;

Internal accounting ledger of securities transactions and internal accounting ledger of funds and settlements on securities transactions and operations lacked all the necessary information;

Company failed to maintain the subsidiary internal accounting ledger of marginal transactions, subsidiary internal accounting ledger of settlements on marginal transactions and connected operations, subsidiary internal accounting ledger of the securities on marginal transactions and connected operations, subsidiary internal accounting ledger of futures, subsidiary internal accounting ledger of settlements on futures, subsidiary of internal accounting ledger of open positions on future contracts and options;

Company failed to comply with the requirements set by the regulations to maintain (fill in) internal accounting documentation;

Company violated the client’s demand to return the funds from a special broker’s account;

When signing a trust agreement, Company did not inform the client of securities management risks in the securities market;

Company failed to work out and approve manager’s prospectus with general data connected with the procedure to manage securities in the securities market;

Company failed to develop internal control rules to counter the legalization (laundering) of criminally obtained incomes and financing the terrorism according to Russian law;

Company neither identified its clients nor updated their data to counter the legalization (laundering) of criminally obtained incomes and financing the terrorism;

Company failed to register and submit to the authorized body the data on operations subject to mandatory control;

Company did not perform a mandatory audit.

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20.06.2014 00.00.00