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NSMA profile

 

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NATIONAL SECURITIES MARKET ASSOCIATION PROFILE

 

 

National Securities Market Association

The self-regulatory organisation "National Securities Market Association" (NSMA) (abbreviation in Russian - ), was founded in January, 1996 by the participants of the government bond market - leading Russian banks and investment companies. At this time the emerging national market lacked the standards of professional standards and business customs were just originating. It was also threatened by the limited scope of communication facilities - both between the participants of the market, and between them and regulators. Because of the shortage of highly experienced staff it was also necessary to unit efforts of institutions in the work on concrete fund projects. The international experience also prompted the necessity of standardization of the professional activity. Collective efforts and decision were needed to solve the problems existing in the market: observance of obligations before contractors, reduction of risks on carried out operations, maintenance of clients and investors rights, fastening and improvement of the existed on that moment practices of conducting operations on the Russian securities market.

The Ministry of the finance of the Russian Federation and the Bank of Russia, and subsequently The Federal Commission for the Securities Market, the main regulators of the financial market, have approved the initiative of the largest participants of the Russian securities market to create the professional organization based on principles of self-regulation, which mission is the growth of investment potential of the Russian economy by means of the creation of conditions for the stable development of the Russian securities market and the increase of its attractiveness for investors.

Corner stone of NSMA ideology is the cooperation. All the results of the Association were achieved through the constructive interaction with our partners: legislative bodies, bodies of state authority and management, associations, financial institutions, information agencies and other organizations, whose activity is closely connected to the Russian securities market.

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Strategic tasks of NSMA

For the realisaton of its mission NSMA set the following strategic tasks:

  • To increase the level of technologies and the number of financial tools to promote improvements in the services for the maintenance of the stable development of the Russian securities market (including sectors of government bonds, corporate securities and derivatives), the growth of transaction volumes, attraction of investments and capitalisation of the national economy.

  • Creation of the constructive interaction system and cooperation between legislative bodies, government regulating departments and professional participants of the financial market.

  • Reduction of risk factors in the securities market, transparency increase of securities operations, protection of clients' and investors' rights by means of:

    • constant development of NSMA professional standards, first of all - Code of diligent business dealing;

    • development and implementation of new standards in accordance with the market and its participants requirements (REPO standards, underwriting standards, risk management standards and etc.);

    • formation of NSMA rating system;

    • development of corporate and personal contacts between the participants of the market, promoting formation of a trustworthy business environment;

    • increase of a professional qualification and expansion of progressive expert skills among the members of the Association.

  • Promotion of the Russian securities market opportunities and its participants - members of NSMA among the internal and external investors, among Russian and foreign business institutions, integration of Russian securities market into global financial market.

  • Expansion of NSMA members business, reduction of their expenses using the advantages of association and collective efforts of solving common problems.

  • To become a leading coordinator of participants' activity on the Russian securities market and the main partner of the government legislative, executive and supervising bodies.

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History of National Securities Market Association.

 

Formation and the first steps of the Association (1996 - 1997)

The basic results of this stage were:

  • Development of the first professional standards in the Russian securities market.

  • Formation of basic legal and supervising conditions for the activity of credit institutions in the securities market.

  • Participation in the development of new tools and technologies of the securities market.

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Restoration of the securities market after 1998 crisis and development of self-regulation (1998 - 1999).

The basic results of this stage were:

  • Proposals of the Association were accepted and included by the government into its Program of the securities market restoration.

  • NSMA professional standards gain a foothold and are used widely by the participants of the market.

  • Interests of credit institutions were supported during negotiations with the government on re-structuring the markets of government bonds (GKO) and Minfin bonds (OVGVZ) and the main portion of the proposals was accepted by the government.

  • Preparation of the offers on a cancellation of the administration bill about division of banks.

  • Participation in the development of the normative documents of regulating bodies concerning operations of credit organizations in the securities market.

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Recognition of NSMA as one of the leading self-regulatory professional organization and development of the securities market (2000 - 2001):

  • NSMA was granted the license on supervising brokerage, dealing, depositary and trust management activity, and thus performs, from this moment, all functions of self-regulatory professional organization including the issue of petitions for licensing the members of the Association, accumulation and analysis of business reporting information, realization of the control and inspection functions.

  • Proposals on the development of the regional markets, russian eurobond market and REPO operations were directed to legislative and executive bodies.

  • The concept of creation and development of the corporate securities market was directed to the President of Russian Federation and to the Government of Russian Federation.

  • Organisation and holding of the first meeting of Russian enterprises - emitters.

  • Formation of NSMA Council of Emitters.

  • Elaboration of the system of disclosing information by the enterprises - emitters.

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NSMA today and the perspectives.

At present NSMA is the main professional association, which has the full set of government licenses for the activity as a self-regulatory organization. This gives NSMA the right to carry out the supervising functions over banks and investment companies as to the brokerage, dealing, depositary and trust management activity and to perform all functions of self-regulatory professional organization including the issue of petitions for licensing the members of the Association, accumulation and analysis of business reporting information, realization of control and inspection functions. NSMA constantly cooperates with bodies of legislative and executive authority - Ministry of Finance of Russian Federation, Bank of Russia, Federal Agency for Financial Markets, Ministry of Economic Development and Trade and others, which form the economic block of the Russian Government. The first professional standards developed by the Association are widely used by more than 200 of its members from 22 regions of Russia.

In December 2003 NSMA has become an associate member of the International Securities Market Association (ISMA). This opens new perspectives and opportunities for the Association and its members as for broadening of international contacts, development of the new market tools and procedures, and further integration of the national securities market into international one.

As a self-regulatory professional organization, National Securities Market Association provides its members with the following opportunities:

  • close and fruitful cooperation with legal and supervising bodies;

  • provision and assertion of their interests in the market;

  • elaboration of tailor-made programs and procedures;

  • full set of preparatory and consulting services for licensing;

  • accumulation and analysis of business reporting information;

  • recommendations on conducting operations according to the normative documents of the Federal Security Commission, Bank of Russia and to the standards of NSMA on the basis and as a result of the Association inspections of the member institutions.

  • professional information in the weekly bulletin of NSMA;

  • assistance in preparation and in passing examinations for the qualification certificate;

  • latest professional developments and exchange of views at NSMA conferences and seminars;

  • advertising of NSMA members’ services via the Association arrangements and publications;

  • professional training of Association members stuff at NSMA seminars.

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Alongside with the current activity the National Securities Market Association plans to realize many new projects in 2003 including:

  • Introduction of several perspective securities tools, operations and technologies (issue of regional bonds, development of domestic Eurobond market, introduction of REPO operations, development of mortgage, derivatives and initial forms of securitisation).

  • Development of the existing legal and normative system, making it favourable for the investors and the participants of the market.

  • Introduction for the usage of the NSMA members of the automated system of preparation and transfer to the supervising bodies of the accounting information.

  • Optimization of the internal securities accounting and reporting system of the NSMA members.

  • Development and approbation of the rating methodology of the market participants.

  • Preparation and implementation of programs of the development of the Russian financial market, its segments, including the regional ones.

  • Establishment and development of business contacts with the leading Russian and international associations of a similar profile and some other projects.

 

Russian Federation Financial Monitoring Committee is currently compiling a List of organisations and individuals reported to be involved in extremist activities.

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