Russia adopts anti-insider law

Dmitry Chernyy

Muranov, Chernyakov & Partners

+7 495 783-74-50

Legislation against insider dealing and, most importantly, its systematic and effective enforcement (including the legal prosecution of offenders) is an integral part of any civilized financial market, not least a market that claims to be international. Mass investors are prepared to work on the market only when they are protected against fraud (insider trading is simply a kind of cheating, and is considered as such in many countries), unequal access to information and losses caused by this inequality.

So far Russia has had no anti-insider legislation. Although inside dealing was criticized in the Code of Conduct approved by the Federal Financial Markets Service (FFMS), and article 15.21 of the Code of Administrative Offences established liability for trading on the basis of insider information, there were no effective legal means to identify insiders and bring offenders to justice. According to FFMS, market-makers expose hundreds of suspicious transactions every year - but there are no known Russian cases of insiders being prosecuted.

The draft law takes into account international experience in the le