The head of the Russian bank Gazprombank, Alexey Desyuryevich, has confirmed that the lender will be increasing its holding of UFA money. Earlier, it had refused to increase the amount of available funds to settle the balance of its U.S. counterpart Citibank. This was followed by a similar refusal to supply credit lines to General Electric Corporation (GE). UFA had been refused funding by GE Capital when it applied for an international merger involving it and its Russian rival. The Russian government blocked the deal on the grounds that the combined company would become a danger to Russia’s national security.
UFA has not received such a strong response to its application from any other country so far. However, it is clear that the risk associated with investing in UFA is still present. Russian banks and finance ministry officials have repeatedly stated that there are no legal impediments to ufa players. There are, however, clear indications that the government wants to strengthen the control of banks over the financial assets of their clients. The decision to allow the free agent to continue to manage its credit portfolio, despite the ban, indicates that the authorities are desperate to prevent the country from sliding back into a severe financial crisis. If the recent events are anything to go by, the Russian government will once again attempt to introduce a form of indirect state control over its financial system.
The contract between UFA and GE Capital gave rise to a situation whereby the U.S. company had to fight to maintain its existing credit contracts. According to an agreement signed by UFA and GE Capital, the former had the exclusive right to buy and sell shares of stock from the latter. However, the contract contained a clause which stated that the company had to seek the approval of the regulator, the Financial Services Authority before purchasing shares of U.FAs. Under the agreement, the company was also obliged to pay GE Capital an exit fee if it decided to terminate the deal. If it was not approved by the FSA, the company was obliged to pay UFA fees up to three times the amount of the exit fee.
In September 2008, following a review by the FSA, the UFA was allowed to restart trading in the Russian market. Its operations are restricted to a small number of Russian companies. However, in March 2009, following the outbreak of the financial crisis, UFA was granted permission to operate on foreign markets. It is believed that the changes to the law were prompted by the FSA’s failure to convince both lenders and players to adhere to the terms of the contract. The new law stipulates that a player becomes a free agent once the contract ends. It also stipulates that a player can only sell or buy one thousand pounds of allotted UFA shares at any one time.
If a player loses his accrued seasons, he is not obliged to play for another team in the same league or with the same club for three more years. He has to give up all rights to the UFA services and cannot enter into any transaction that would restrict his freedom of action. Once the player becomes a free agent, he may sign a free contract with any club of his choice. However, he is still obliged to play for twelve months for any club from the league where he is playing for at the moment.
During the off season, UFA players have no option to play other than the ones that they signed up for. This is the main reason why there are a limited number of players who actually manage to fulfill their contracts with teams. The restricted free agents system was created to prevent UFA players from leaving one team during the off season to sign up for a different one. This system was introduced in response to the growing trend of teams using free agents during the season for nothing more than a rest or training stint.
In cases where a UFA fails to show up for a scheduled training or a match for whatever reason, he receives a warning from the league office. This results in a fine, which he is obliged to pay by missing a match. If this happens for fourteen or more consecutive matches, he is subjected to a disciplinary suspension for the next season. Should a player choose to accept the fine as a way of going away for the summer break, he loses all rights to be an UFA for the following season.
Aside from the fines, UFA players are also prohibited from talking to other clubs during the moratorium period. This is done in order to prevent a player from putting pressure on the coach of his team. If a player signs a new contract and chooses to leave the club, he is subject to a disciplinary suspension. However, if a player signs a new deal and then quits, he is free to sign a new contract immediately. This means that all contracts that a player signs while on a free agency are only valid for the current season.