Monitoring of the Federal Legislation dated 13.10.2005

Federal Law of October 12, 2005 on the Amendments to Articles 83 and 85 of the Federal Law on the General Principles of Organisation of Local Government in the Russian Federation, Federal Law on the Amendments to the Budget Code of the Russian Federation Pertaining to Regulation of Inter-Budget Relations and to Article 7 of the Federal Law on the Amendments to Parts 1 and 2 of the Tax Code of the Russian Federation and on Invalidation of Some of the Legislative Acts (Provisions of Legislative Acts) of the Russian Federation on Taxes and Fees

The amendments transfer the beginning of the reform of the local government from January 1, 2006 to January 1, 2009. Within the mentioned transient period, the laws of the subjects of the Russian Federation may define the procedure of solving of issues of local significance of the newly created residential settlements, as well as opportunities of solving of issues of local significance of the newly created residential settlements by the bodies of local government of the municipal region.

From January 1, 2006 to the end of the transient period, provisions of the Federal Law on the general principles of organisation of local government in the Russian Federation may be applied in full amount.

When forming and endorsing the draft budgets of municipal regions for the years 2006-2008, resources of the regional funds of financial support of residential settlements may be distributed using the figures of actual incomes and expenses for the reported period or forecasted for the planned period incomes and expenses of the budgets of residential settlements.

The Law changes the procedure of distribution of grants form the regional funds of financial support of municipal regions (urban districts). In the transient period before the registration of the proprietary rights, federal and regional bodies of state power may use on gratuitous basis the property handed over to them for the implementation of their authority. Appropriate changes are introduced in the budget and tax legislation.

The Federal Law is entered into force from the day of its official publication, however, no sooner than one month after the day of its official publication except for individual norms to be entered into force from January 1, 2006.

Letter of the Federal Service for Financial Markets No. 05-OV-02/15328 of September 27, 2005 on the Information from the Register of Certified Persons

The fact of registration in the register is not included in the qualification requirements to the specialists of the financial market. Information on the certified persons and issued qualification certificates is entered in the register of the Federal Service for Financial Markets at the moment of issue of the qualification certificate. Qualification certificates issued before the entry into force of the Order of the Federal Service for Financial Markets of Russia No. 05-17/pz-n of April 20, 2005 on the endorsement of the Regulation on the specialists of the financial market that are not limited in time preserve their force regardless of the fact of registration (re-registration) in the register.

Letter of the Federal Service for Financial Markets No. 05-OV-03/14492 of September 13, 2005 on the Increase of the Registered Capital of a Joint-Stock Company with the Cost of Net Assets Being Lower Than Its Registered Capital

If the cost of net assets of the issuer joint-stock company proceeding from the information of its annual accounting reports for the second and each subsequent fiscal year appears to be less than its registered capital, the terms of issue and circulation, as well as the terms of issue of stocks placed to increase the registered capital, are in violation of the legislation of the Russian Federation, since the joint-stock company has to reduce the registered capital or take the decision on its liquidation.

However, if the cost of net assets as determined from the information of the quarterly accounting reports for the most recent verified reporting period as confirmed by the audit statement appears to be greater than or equal to the registered capital, the terms of issue and circulation of stocks placed to increase the registered capital of such joint-stock company is not in violation of the requirements of the legislation of the Russian Federation on securities.