UPDATE 2-Sistema/Uralsib bid report was an error-watchdog

(Releads with FSFR comment, updates share price)

MOSCOW, Feb 7 (Reuters) - Russia's state financial market watchdog said on Thursday its report on services conglomerate Sistema's (SSAq.L) offer to buy Uralsib Bank was a technical error and launched an internal investigation.

"The information earlier published on the FSFR page ... is wrong. The release of this information is a result of a technical error," FSFR, the watchdog, said in a statement.

"An internal investigation has been launched within FSFR in order to reveal price manipulation," it said.

The FSFR said in an earlier statement on its Web site Sistema had made a mandatory offer to buy the shares in Uralsib Bank (USBN.RTS) and had sent Sistema instructions to adjust the offer in order to comply with the requirements of Russian law.

Uralsib Bank stock shed around 3 percent after the statement to $0.0185 on the Russian Trading System (RTS). The overall RTS was down 1.6 percent.

Under Russian law, an obligatory offer must be made if a company acquires 30 percent or more of another firm.

But Sistema does not currently own any shares in Uralsib and company spokesman Kirill Semenov said no offer had been made.

"We have made no offers to Bank Uralsib. This information is wrong," Semenov said. He said Sistema had received no instructions from the watchdog.

A source within Russia's anti-monopoly agency also said Sistema had not applied for permission to buy Uralsib Bank. A spokesman of Uralsib Bank said there was no acquisition of Uralsib Bank by Sistema.

Uralsib Bank, ranked among Russia's 10 largest, is majority owned by Uralsib Financial Corporation (UFC), in which billionaire Nikolai Tsvetkov has a majority stake.

Sistema's key asset is Russia's No. 1 mobile phone firm, Mobile TeleSystems (MTS) (MBT.N), but it is also actively expanding its presence in the Russian banking sector.

Its banking business currently includes the Moscow Bank for Reconstruction and Development (MBRD), East-West United Bank and Dalcombank. Sistema also spans technology, real estate, retail, oil, tourism, media and healthcare. Its London-listed stock was down 3.18 percent at $33.5 by 1255 GMT. (Reporting by Maria Kiselyova and Dmitry Sergeyev; editing by Sue Thomas)