Protocol of the Financial Markets Consulting Committee Session
Name and Surname: Anastassiya Denissenko
Date: January 26, 2018
Word count: 433
Research Task One: Primary Legislative Acts
Document:
Act: Protocol
Institution: Eurasian Economic Commission
Title: Protocol of the Financial Markets Consulting Committee Session
Commentary:
The Protocol consists of the decisions of the Eurasian Economic Commission (hereafter – Commission) on ten issues concerning the regulation of the financial markets within the Economic Union. One of the main goals of the Commission at this session was to discuss the aspects of financial integration of the member-states of the Eurasian Economic Union.
Regulation of the foreign exchange systems of member-states was one of the major concerns. The Commission passed a decision to oversee the possibility of institutionalizing the foreign exchange system by creating an interdepartmental commission with a responsibility to coordinate the foreign exchange system (article VI.2). In addition, the Commission decided to encourage the liberalization of the foreign exchange system and asked member-states to determine the possible levels of currency dumping (article VI.4a) as well as the limits of currency volatility (article VI.4b). These measures were taken to harmonize the financial markets of member states and stimulate the economic-financial relations within the Eurasian Economic Union.
In addition to member-states’ actions directed at markets’ harmonization, the Commission suggested to initiate a supranational regulatory agency to supervise and regulate the financial markets (article I.2.3). The institutionalization of financial integration discourages rule violation and free-riding, catalyzing the integration process. Moreover, the Commission decided to encourage information exchange (including confidential information) between the member-states provided that confidential information is secured (article II). Information exchange reduces uncertainty and promotes cooperation. Both articles I and II aim to encourage regional economic integration.
Another mean of economic integration is “Broker, dealer” pilot project (article III). The aim of the project is to promote financial integration through non-discrimination of brokers and dealers. “Broker, dealer” project grants brokers and dealers of member-states equal access to the stock markets of the member-states of the Eurasian Economic Union. By allowing brokers and dealers to operate freely at stock markets, the Commission encourages the integration of the financial markets of member-states, as the financial markets gradually become interconnected.
The Commission passed decisions concerning the OSAGO insurance (type of an automobile insurance). Russian Federation decided to eliminate tariff and legislative barriers for the member-states of the Economic Union (article IV), thus simplifying the purchase and use of automobiles within the union.
Overall, the Protocol discussed and decided on the means of financial integration. The Protocol was followed by the “Strategies and tactics of the financial integration” forum in Moscow (March 20, 2014), where it was decided to start the formation of the supranational regulating agency by the year 2020. Although the majority of the means have not yet been implemented, the discussion laid the foundation to further development of the Eurasian Economic Union.