A STRING of blue-chip City firms have signed up to a groundbreaking project to sell financial expertise to Moscow.
Investment banks Barclays Capital and JP Morgan, Lloyd’s of London and elite law firm Freshfields have joined the initiative, which has the personal backing of President Vladimir Putin.
TheCityUK, the British financial services promotion group spearheading the idea, told Scotland on Sunday that “more than 200 UK organisations” are now involved as momentum has built quicker than expected.
Chris Cummings, chief executive of TheCityUK, said: “Things have gone extremely well. We are well into the project and are very pleased.
“We have gone from virtually nothing, just a handful of companies who were interested in what business could be done financially and professionally in Russia, to lots of businesses, including major blue chips.”
He said firm financial contracts have now been signed between British finance and support firms and the Russians. “There have been up to 20 and it is growing,” Cummings said.
Notable progress had been made in seven areas including securities trading, derivatives and legal resolution of disputes.
“We have had nothing but the most open and positive dealings with them. It has become a really good partnership.” Cummings added. “Derivatives is coming along really well and there has also been progress on [business] dispute resolution.
“Having legal certainty would give businesses the grounds they need [for investment] there. UK commercial law is the most renowned globally for commercial dispute resolution.”
Also involved in the project is the Chartered Institute for Securities & Investment, the Square Mile’s leading organisation for promoting financial examinations and business ethics.
TheCityUK chief said one of the most recent activities the Russians had asked for help on was promoting a culture of long-term savings.
“They want to develop capital markets, and this goes hand in hand with a look at pensions provision there. We have been specifically requested to help them with this, and it has great potential,” he added.
On the other side, the project involves, among others, the Moscow stock exchange, the Russian National Association of Securities Market Participants and the National Foreign Exchange Association.
Western firms across many industries, from Big Oil to alcoholic drinks, have expressed concerns about the perceived fragility of the rule of law and property for doing business in that country.
These fears have hamstrung much-needed foreign investment in the country. “It has undoubtedly held back Moscow’s development as a financial centre,” one UK market strategist said.
But TheCityUK claims the Russian authorities are now determined to grow the capital as a financial centre to offer “diverse and innovative ways” to put Russia’s natural resource wealth to work to drive growth across all sectors of the economy.
City professionals are now looking at the future of the Russian regulatory environment, Cummings said.