Complaints about non-compliance decisions: 1 October report on committee operations

A Bank of Russia committee was launched on 28 January 2018 to look into complaints about decisions as regards ex-members of corporate governing bodies, other executives and major shareholders in financial institutions whereby they are found in breach of qualification / business reputation legislation. As many as 141 complaints were registered as of 1 October.

In the time since the committee was launched, 48 complaints were reviewed and redressed, with another 48 dismissed. Eight complaints were not admitted due to the non-existing subjects of enquiry (no database entry about the complainant), 23 complaints were not reviewed following their non-compliance with statutory requirements, and decisions on 14 complaints are pending.

This year's third quarter saw a trend towards a rise in the number of complaints from submitters whose operations are related to non-bank credit institutions. As of 1 October, 131 complaints (against 48 credit institutions) came in from applicants in connection with credit institutions’ operations, while 10 complaints were about non-bank credit institutions (4 complaints concerned 4 insurance companies, 5 complaints were related to 4 management companies, and 1 complaint was against a microfinance company).

The regulator reports that a large share of total complaints (over 20%) failed to meet Bank of Russia Ordinance No. 4666-U, dated 26 December 2017, ‘On the Procedure for Appealing Against a Person’s Recognition as Non-compliant with Qualification Requirements and (or) Business Reputation Requirements’. The Bank of Russia reminds of the need for compliance with statutory registration requirements for complaints including those for their content, mandatory submission of documents evidencing the non-involvement of the applicant in action (inaction) resulting in negative implications for financial institutions’ operations.

The committee was set up following the entry into force of Federal Law No. 281-FZ, dated 29 July 2017, which aims to improve mandatory requirements as regards shareholders, members of corporate governing bodies and other executives of financial institutions. The regulatory changes provide for the applicant's business reputation to be restored in the event their non-involvement has been established in their prior decisions that entailed negative implications for the financial institution. This being the case, the committee's decisions constitute legal ground for the Bank of Russia to remove the applicant's data from the relevant database.