By Ivan Anderzhanov in Moscow

A groups of Western bulge bracket banks have called on Russia’s Federal Financial Markets Service to repeal new rules limiting the amount of shares Russian companies can sell in foreign stock exchanges.

According to last Friday’s Vedomosti newspaper, representatives of Credit Suisse Group, Deutsche Bank, Morgan Stanley, Royal Bank of Scotland Group and UBS sent a joint letter asking the financial regulator not to alter the existing IPO regulations.

The proposed regulations, which are intended to take effect by September 2009, aim to restrict domestic companies from running to foreign exchanges and retain fresh equity issuance for domestic bourses. The controversial new rules on stock floats would effectively limit initial public offerings on foreign markets to 5% of the company.

In a comment piece last week for EmergingMarkets.me, lawyers from Latham & Watkins in Moscow said the move could hike the cost of equity capital for Russia companies at a time when many of them are over-leveraged and starved for equity financing.

By Ivan Anderzhanov in Moscow A groups of Western bulge bracket banks have called on Russia’s Federal Financial Markets Service to repeal new rules limiting the amount of shares Russian...