Competition in Russia's financial market is regulated by the Federal Law No 117-FZ, which came into effect on December 29 2001. It governs both Russian or foreign (operating in Russia) banking, insurance and leasing companies, non-state pension funds, professional participants of the securities market and other entities rendering financial services.
The Russian antitrust authorities exercise control over economic consolidation (mergers and acquisitions) by requiring prior authorization (in some cases subsequent notification) of mergers and acquisitions. Chapter 6 of the Law 117-FZ specifies the cases that are subject to such control. The Russian Ministry for Antitrust Policy approved the detailed procedures for obtaining an authorization on February 28 2001.
Authorization is required for: (i) acquisition of a shareholding of more than 20% in target company; (ii) acquisition of assets, the value of which exceeds 10% of the book value of all assets of a target company; (iii) acquisition of the right either to control the operations of a target company or to act as its management body; (iv) establishment of a financial organization and amendment of the charter capital; and (v) merger of financial organizations.
Prior authorization is required for any of these transactions if the amount of the charter capital of the target company (company being established/surviving company in the case of merger or other reorganization) exceeds the amount established by the Russian government. If the charter capital is below the established amount subsequent notification is required instead of prior authorization.
Failure to have a transaction authorized may lead to its invalidation in court.