OREANDA-NEWS. June 27, 2014. The Federal Antimonopoly Service (FAS Russia) established the fact of violating the antimonopoly law by the group of persons comprising “Market Council” Non-Profit Partnership and “ATS”OJSC (Part 1 Article 10 of the Federal Law “On Protection of Competition”).

The companies set additional requirements in the Provisions on the procedure for giving financial guarantees on the wholesale market to the organizations that can give financial guarantees to the participants of the wholesale market of electric power (capacity), which is a mandatory condition for trading on the wholesale market.

In particular, such organization should be a bank, with over 4 billion RUB equity and have an international ranking of long-term creditability.

Such restrictions of wholesale market participants in choosing economic entities that are able to provide them financial guarantees, can increase financial costs of wholesale market participants for servicing their obligations, and in some incidents be the reason why these obligations cannot not be honoured completely or partially, which can incur sanctions up to depriving of the status of a participant of the wholesale market.

Thus, this version of the Provisions on the procedure for giving financial guarantees on the wholesale market reduces the number of economic entities that can provide services for giving financial guarantees on the wholesale market, which infringes the interests of the participants of the wholesale market.

“Market Council” Non-Profit Partnership was issued a determination to make changes to the Provisions on the procedure for giving financial guarantees on the wholesale market by excluding the requirements obligating an economic entity that are not provided for by the current legislation: a candidate for being accredited within the system of financial guarantees on the wholesale markets to have a bank status , obtain an international raking from the rating agencies, and observe the size of bank equity.

As explained by the Head of FAS Department for Control over Electric Power Industry, Vitaly Korolyov, to protect the interests of suppliers of electric power industry a positive measure was to introduce a mechanism of financial guarantees for the entities delaying payments to the wholesale market. “It is not a secret that non-payments by providers of last resort and energy sales companies on the wholesale market frequently are the consequence of indebtedness of various consumers. Therefore, the mechanism of financial guarantees must be available for use by the persons whose interests it guarantees”, said Mr. Korolyov. “The criteria of bank accreditation set by the Supervisory Council of “Market Council” Non-Profit Partnership for this purpose were clearly excessive: even the bank that effects all payments on the wholesale market does not meet them, which is a much bigger amount of finances that is confirmed for payment through a mechanism of financial guarantees”.

“We hope that “Market Council” Non-Profit Partnership will execute the determination and ensure that that market participants are able to obtain financial guarantees. It will have a positive impact upon market stability and developing competition”, emphasized Vitaly Korolyov.