The Federal Commission on the Securities Market (FCSM) has decided to tighten regulations on circulation of Russian securities on foreign markets. It believes that there is a risk of outflow of Russian shares from the country. At the same time, the FCSM Expert Board did not support this decision at its meeting on October 26. The previous regulations on the procedure for issuing the FCSM's licenses to allow circulation of Russian shares and bonds abroad were approved by the commission in April 1998. The regulations were quite liberal. There were two requirements for getting a license to trade at Western exchanges: registration of the issue of securities with the FCSM and a license for operations with these shares at one of the Russian exchanges. Nonetheless, after the crisis (of 1998) the interest in Russian shares reduced sharply, and the commission received no applications for a license to offer shares on foreign markets. This situation has begun to change now. Despite all their difficulties, Russian companies have continued to issue ADRs for their shares, which is far more expensive than standard operations with securities on Western exchanges. For example, the NEWEX exchange, founded last year in Vienna, was going to begin operations with Russian shares. Nonetheless, because of the FCSM's negative attitude to this idea, only deals on ADRs were allowed at NEWEX. The growing interest of foreign investors in Russian shares has worried the commission. The FCSM has decided to substantially tighten regulations on this issue, and only a couple of paragraphs have been retained from the earlier document. The respective project had already been reviewed by the FCSM Expert Board on October 26. A representative of the commission pointed out that the new regulations would introduce a lot of new requirements for issuers, but nonetheless, the document would not apply to the existing regulations on ADR issue (which requires a special license from the FCSM). The new rules will not be applicable to state and municipal securities either, the Kommersant newspaper wrote.