The Bank of Russia's new requirements for the investment of pension accruals will encourage private pension funds to invest more in the real sectors of the economy, including high-tech sectors. The Bank of Russia's relevant status was approved by the regulator's board of directors and will be submitted to the Justice Ministry for state registration in the near future.
"The Bank of Russia has continued its policy of gradually reducing investment in the banking sector. By January 1, 2019 the highest share of these assets in the investment portfolios at private pension funds will be cut from 40% to 30%. The base for the calculation of this limit will be broadened using deposits and bonds with maturity in less than three months, and also settlement accounts," the Bank of Russia said in a press release.
Investment funds and management companies will get the opportunity to invest pension accruals in shares of Russian joint stock companies that are allowed for trading in the IIM-Prime segment on the Moscow Exchange. This segment covers shares of high-tech issuers with market capitalization of at least Rub 6 bln. The share of investment of this kind will be limited to 5%.
Effective July 13, 2017 the Bank of Russia, for regulatory purposes, will make use of the ratings assigned by the companies that the Bank of Russia included in the register of credit rating agencies (CRAs). As a number of issuers have not yet been rated by Bank of Russia-accredited agencies and to avoid any rush with the assignment of ratings, starting July 1, 2017 it will be allowed to invest pension accruals in the bonds that are on the exchange's highest quotation list. This measure will be temporary and will last several quarters. Upon expiration of the transition period (after most issuers are assigned ratings) there will be used solely ratings that are assigned by Bank of Russia-accredited CRAs.
The document provides for gradual exclusion by July 1, 2019 of Mortgage Participation Certificates (MPCs) from pension accruals. However, if under MPCs assessment of real estate is provided by a reliable appraiser, it will be allowed to hold these securities in the portfolio until maturity. Instead of mortgage certificates private pension funds will be able to invest pension accruals in real estate by buying fund units in mutual funds for unqualified investors.
