The Draft Law proposes additional control over transactions carried out by large financial organizations whose assets exceed the thresholds established by the Government of the Russian Federation, irrespective of the assets of financial organizations subject to economic concentration.

The new rule applies if one financial organization (a group of persons which includes a financial organization) acquires another financial organization of the same type (credit, insurance, clearing organization, etc.). The type of financial organization is determined pursuant to Article 4.6 of Federal Law No. 135-FZ on Protection of Competition dated 26.07.2006.

For example, if the acquirer is a credit organization (the acquirer's group of persons includes a credit organization) and the entity subject to economic concentration is another credit organization, the assets of the acquiring credit organization (a credit organization that is a member of the acquirer's group of persons) will be evaluated. If the acquirer's group of persons includes several credit organizations, their aggregated assets will be factored in.

As noted in the explanatory note, the estimates of FAS Russia and the Bank of Russia show that the financial market is highly concentrated in certain segments, such as provision of services to natural persons (lending, fundraising, payment and investment services). This is caused, among other things, by the scale effect and network effects of the major market participants and faster development of their digital services. The higher level of concentration increases the gap between larger and smaller organizations. Smaller market players cannot compete with larger players as the latter have significant competitive advantages (such as resources, personnel, etc.). This has a negative impact on the competitive environment and leads to higher additional costs for businesses and the public.

We will follow further progress of the draft law.