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Bank of Russia to Make Stress Tests Mandatory for NPFs

28.07.2016 14:09 / TASS

The Bank of Russia will make stress tests mandatory for non-state pension funds (NPFs) to measure accepted risks, says a newly published directive of 4 July 2016.

"Stress tests must be undertaken by funds in the event of change or planned change in composition of assets and liabilities or in significant change of market conditions but at least once quarterly", states the directive.

If the stress test fails, the fund is to draft and present to the Central Bank a capital adequacy ratio correction plan.

The directive introduces gradual implementation of risk management system requirements. Within six months, NPFs are to approve internal regulations and find staff to manage risks. After six months, funds are to identify risks and report them.

Within a year, funds are to ensure that their investment process is compliant with risk management requirements.

"Funds must perform stress tests 18 months after the directive has been enacted",states the document.

The directive has been filed for registration with the Ministry of Justice and will be enacted 10 days after official publication in the Bank of Russia Newsletter.

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