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Vladimir Putin: Good afternoon, ladies and gentlemen,

For the most part minority shareholders of both Russian and foreign investment companies are represented here in this hall today. The main theme of our meeting is the development of the Russian stock market and also the interaction between large Russian companies and infrastructure monopolies with minority shareholders.

These are questions of equal importance for you as investors, for those whose interests you represent, and for the Russian economy in general.

I think we will also discuss the question of protecting the interests of minority shareholders and the conditions for their activities in modern Russia. It is very clear to us that the development of the Russian economy depends largely on investment activity. This is something the Russian authorities and the Government are paying particular attention to.

The Russian economy, as you know, has been showing a stable and healthy rate of growth for some time now. This year we have 12 percent investment growth from all sources compared to last year. The decision to give Russia an investment rating also confirms the positive changes taking place.

I am firmly convinced that these trends will continue. And this will happen not just through strategic investment, but also through portfolio investment.

Several circumstances have helped stimulate investment activity in Russia, above all, improvements in our legislation. Modern Russian legislation helps take the interests of minority shareholders into account during decisions to change a company’s charter, set the agenda for general shareholders’ meetings and other questions.

Different countries have different ways of settling problems; I mean through the courts. In Russia, disputes between companies and their shareholders are the exclusive jurisdiction of arbitration courts. The procedures for appealing court decisions are also becoming clearer now. Tougher demands have been placed on companies concerning transparency and information disclosure, including when issuing securities.

We now have an institution of independent financial consultants, who must give their stamp of approval for an issue to go ahead. There has been a lot of talk over recent years about having Russian companies change over to international financial reporting standards, but now the first practical steps in this direction have been taken.

The Russian business community is aware of the need to protect investors’ and shareholders’ rights. You know that we now have a Corporate Governance Code in Russia. True, its provisions are not binding, but there are procedures in place to encourage its use and application in corporate life.

Of course, we know that there is still more work to be done in creating the right conditions for investment. We understand that this is not a simple process and we will continue our work. I can tell you that the Government is set to meet on November 11 to discuss measures to develop the financial market.

We think that we still have several serious problems here that remain to be tackled. The first is the lack of coordination and the contradictions between state regulatory bodies. We have four ministries and the Central Bank all working in this area. This gives rise to the second problem: a large number of various rules and regulations, with only a few questions are directly regulated by legislation. And this, in turn, leads to the third problem: the more of these rules there are, the less protection investors have.

Finally, there is a problem of which you are all aware, the limited number of instruments for working on the financial market. At the Government meeting that I mentioned, a comprehensive examination of all these questions will be undertaken and the Government hopes to have a plan in the form of legislative initiatives aimed at changing this situation ready to be presented to the parliament by the beginning of next year.