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Business reputation

Requirements for business reputation make the work of the heads, members of executive bodies, staff and owners of financial corporations more responsible and professional.

28 January 2018 is when the new requirements for business reputation for the heads, members of executive bodies, other officials, buyers (holders) of 10% or more of shares (stakes) (including, as part of a group of persons), controllers of holders of 10% or more of shares (stakes) of credit institutions, insurance companies, non-governmental pension funds, management companies of investment funds, unit investment funds, non-governmental pension funds as well as microfinance companies came into force.

The law expanded the list of business reputation compliance criteria with the established requirements. A cross-sectoral approach has been put in place for the control of compliance with requirements for the business reputation of the heads, members of executive bodies, other officials and owners of financial institutions.

In view of the above, if a person, for example, does meet the requirements applied to bank officials, he will not be able to hold executive positions or buy large stakes in insurance companies, NPFs, MCs or microfinance companies.

Now, all financial market participants will have to operate under levelled-out requirements for the procedure of buying large (10%+) blocks of shares (stakes) and installing controls over large shareholders (members), and also for the procedure of disclosing information about shareholders (members) and about ownership structure. The procedure is being introduced to rectify violations of the requirements for business reputation.

In addition to the requirements for business reputation, the law introduces requirements for the qualification of officials of financial institutions, for the financial standing of the buyers of 10% or more of shares (stakes), as well as a number of other requirements and limitations.

The Bank of Russia monitors the process of compliance with these requirements.

A person whose business reputation or qualification has been recognised as non-compliant with the established requirements shall be entitled to file a complaint with the Bank of Russia Complaint Review Commission against decisions made by Bank of Russia officials on his/her non-compliance with qualification requirements and/or requirements for business reputation established by federal law (hereinafter, the Commission). The complaint shall enclose documented evidence of the applicant’s non-involvement in the decisions or actions/inactions that had negative implications for the operations of a financial institution.

The Commission shall make a decision on the compliance of the applicant’s business reputation or qualification with the requirements established by federal law if it is determined that he/she was not involved in the decisions or actions/inactions which served as the basis for his/her recognition as non-compliant with the established requirements.

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Last updated on: 10/09/2020