On January 20, the State Duma adopted in the first reading Draft Law No. 1082205-8 ("the Draft Law"), which exempts a number of legal entities from the obligation to submit mandatory consolidated financial statements ("CFS"). The Government of the Russian Federation acted as the subject of the right of legislative initiative.
The Draft Law amends Federal Law No. 208-FZ dated 27 July 2010 "On Consolidated Financial Statements" and Federal Law No. 39-FZ dated 22 April 1996 "On the Securities Market."
For an organization to be exempt from preparing CFS, the following conditions must be met simultaneously:
- the organization is not an issuer of securities;
- the organization's participants (shareholders) have been notified of the intention not to prepare CFS and have given their consent. The notification must be sent to the participants (shareholders) as a separate document (in electronic or paper form) and must specify the period within which the participants (shareholders) must express their consent, which cannot be less than 45 days;
- information about the organization's financial position is included in the CFS disclosed by another company within the group. The content, format, and deadline for submitting such information are determined by the group company that discloses the CFS.
However, organizations required to prepare CFS under other federal laws are not exempt from this obligation. Such organizations include, among others:
- parent organizations of banking holding companies and parent credit institutions of credit groups;
- central counterparties, in accordance with Federal Law No. 7-FZ dated 7 February 2011 "On Clearing, Clearing Activities, and the Central Counterparty";
- trading organizers, in accordance with Federal Law No. 325-FZ dated 21 November 2011 "On Organized Trading";
- the central depository;
- public law companies.
According to the authors of the Draft Law, the entry into force of these rules will reduce costs and the administrative burden on organizations belonging to the same group.