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AMs and NPFs Can Invest Pension Savings in Privatized Shares

12.03.2014 13:40 / Interfax

The Russian Government has lifted restrictions on pension savings investment by allowing Asset Management companies and Non-state Pension Funds (NPFs) invest in Russian JSCs, privatized or sold by the Bank of Russia.

Prime Minister Medvedev signed amendments to Government Directive 379 of 30 June 2003.

Directive 379 stipulates that pension savings investment is allowed only through stock exchange DVP trades and best open offers.

The only exception to this rule is pension savings investment in public offers – in this case upfront counterparty delivery or exchange-traded DVP is enough.

However, the statute could not be applied to privatization or sale of Bank of Russia-owned stock, since shares are already owned by the Russian Federation or the Bank of Russia at the time of sale, while placement entails transfer of title to shares from issuer to first owners.

Thus, asset management companies and non-state pension funds were de facto unable to invest pension savings in shares sold during privatization or by the Bank of Russia.

The newly signed directive allows to invest pension savings in Russian JSC shares privatized or sold by the Bank of Russia through stock exchange DVP trades.

Non-state Pension Funds industry reformProject Group №1