Russia’s two main stock exchanges yesterday signed the terms of a full merger aimed at helping turn Moscow into a global financial centre that competes for international capital.

Under the deal, the Moscow Interbank Currency Exchange will buy out private shareholders in the Russian Trading System under a complicated arrangement involving both cash and stock.

It will become official once approved by the two firms’ shareholders this summer and then accepted by the Federal Anti-Monopoly Service at a later date.

“The children have grown up and signed their marriage certificate,” said Central Bank deputy chairman and major MICEX shareholder Sergei Shevtsov.

“This document heralds a new stage in Russian stock market infrastructure development,” the RTS exchange added in a statement.

“The new exchange will be able to compete with other world financial centres by the scale of its business, technological innovation, team expertise, and the standards and quality of service,” the privately-held RTS exchange said.

President Dmitry Medvedev has made the modernisation of Russia a linchpin of his term in office and told an economic forum this month that attracting foreign investors was central to the country’s plans. He said in a Budget address yesterday that “Russia needs to create a new model of economic development based in a large part on private initiative.”

Medvedev hopes to build an entire Moscow financial district and has been holding private meetings with some of the world’s biggest bankers in a bid to get their ideas about how this might be achieved.

Some reported suggestions have included eliminating road gridlock and improving the investment climate by making firms more accountable to independent court decisions and bound to report transparent figures.

But a recurring technical complaint has been the meagreness of the Russian market and lack of financial mechanisms available to consumer investors who take an active interest in stocks in the West.

Some analysts believe the merger will remove much of the volatility from share trading by bringing more volume to a joint stock exchange.

Local investors hope this in turn will keep Russian firms from deciding to list shares in London and Hong Kong and in turn bring companies from other emerging markets and the former Soviet republic’s to the Moscow trade floor.

Russian officials have already voiced plans to list some of the shares of the state oil giant Rosneft – which plans to sell an-other small stake by 2013 – on the joint Russian exchange. Terms of the merger deal reported before the signing said MICEX would pay for 35 per cent of its rival’s controlling stake in cash and acquire the rest in a share swap.

Trading would be conducted on the MICEX floor – the current venue for Russia’s active currency trading – and headed by its current president Ruben Aganbegyan.

Some analysts have expressed concern that the merger may hurt Russia’s smaller investors because it would eliminate competition between the two ­markets and potentially limit the line of efficient investment vehicles.

The head of the new joint exchange said the company intends to raise at least $300 million through a public offering to be held by early 2013.