A draft regulation that establishes new requirements for the investment of pension savings posted on Tuesday, August 23, on the website of the Bank of Russia. The regulator proposes to allow non-state pension funds from mid-July of 2018 to invest for future retirees in the company placing its shares on the stock exchange. According to the explanations of the Central Bank, we are talking about securities of the Russian joint-stock companies admitted to trading in the segment of the market of innovations and investments (MII-Prime). “This section would need to trade paper the high-tech fast-growing companies,” — said in the press release of the Central Bank. To invest in venture projects of the NPF, under the project, will allow no more than 5% of assets.
To start trading stocks venture companies is planned for the Moscow exchange. According to the strategy of market development of innovations adopted by the market in mid-2015, to trading in the segment of RII-Prime will allow companies that meet the requirements for receipt of the second level of listing. In particular, their capitalisation must be at least 6 billion rubles, the company must publish financial statements according to IFRS, have not less than two independent Directors, and its free float has to be more than 10% of the capital (or the market value of free float of over 1 billion rubles).
Now on the Moscow stock exchange sector MII traded securities of 26 venture capital firms, including several mutual funds. According to the exchange, the trading volume in 2015 exceeded 54.5 billion rubles, the total capitalization of the sector is estimated at 264,7 billion roubles To trading in the segment of the RII admitted company with a market capitalization of not less than 150 million rubles. Trading in the IIM sector-Prime while not running.
“Investments in high-tech companies, which are under Pre-IPO, can bring the NPF additional income. If the shares of large companies that are traded on the stock exchange, can grow 10% a year, the yield of investments in start up several times higher,” — said the Chairman of the Board of Directors of the European pension Fund Evgeny Yakushev. He admits that the risks of such investments is higher, so the SPF will be as a loser and those who managed to earn an extra income. “But this practice exists throughout the world. Western pension funds invest part of the funds in venture projects. For Russia this is especially true given the state’s desire to develop an innovative economy,” says Yakushev.
Deputy General Director UK “Kapital” Alexey Belkin, under which is about 70 billion rubles of pension savings, said that the use of pension money for support of innovative companies coming to the exchange, seems logical and reasonable. NPF can obtain additional yield by investing in such companies and Russian start-UPS receive the support of the Russian investor. This is a big problem for our market innovation, because now venture capital firms are often forced to go outside the capital on Western markets,” explained the Manager.
In addition, according to the project, non-state pension funds will allow in two years to invest in mutual funds that invest in real estate. According to the regulator, in contrast to mortgage participation certificates (MPCs), the property is better meets the investment profile of the NPF and the investment funds have a more clear and understandable compared to ISU regulation. The ISA can be saved to maturity, if the regulator considers a fair assessment of the property, which was collateral for this tool.
Market participants believe the regulator’s endeavour to limit investments of pension funds in the ISA are correct, especially after the stories with the funds owned by the banker Anatoly Motylev and native of Sistema Yevgeny Novitsky. In June, the Central Bank revoked the license of the pension funds and the management company, included in the pension group Nowicki for breaches of the law to invest pension savings. The regulator expressed doubts about the reliability of the Fund’s investment in bonds of companies related to their major shareholder. The total assets of NPF exceed 31 billion rubles.
In August 2015, the Central Bank has revoked the licences of seven NPF, which were controlled by the former owner of Bank “GLOBEKS” Anatoly crank. Claims Adjuster were also associated with the quality of the assets of the funds: pension funds Fund managers invested in illiquid bonds of companies Transgazservis”, “Promnefteservis” and “Stroytemp”, and in mortgage participation certificates. The only collateral for these mortgage certificates were to land on the loan to Bank “the Russian credit” bought affiliated company “Tekhnomark”. In pension funds of the group Motylev was 50,3 billion rubles of pension savings, of which, according to preliminary estimates of the Central Bank, the illiquid assets of 35.6 billion rubles Liquidation funds Motylev became the largest insured event in the history of the private pension market.
“We have also in the portfolio of the NPF is ISA, but we do not seek to increase their share”, — says Evgeny Yakushev.
Under the proposed rules, the NPF will also be able to make transactions with derivative financial instruments and to borrow or place them through REPO transactions. “The proposed changes will also allow for diversification of investments of pension funds and reduce risks,” — said the Director of the Department of collective investment and trust management of Bank of Russia Philip Gabunia. In his opinion, this will increase the yield of pension savings, which is now partially “eat” the banking middlemen.
According to Belkin, the opportunity to buy options and fukery on the stock exchange will allow NPF to hedge market risks. “For example, we can buy a call option on RTS index, in order to protect the money of pensioners from the sharp fluctuations of the market,” he said. At the same time, the Manager did not rule out that some funds will use derivatives for speculation in the market. “But I think that the Central Bank will monitor such transactions, because the error of the Manager in this case can be very expensive to its customers,” — said the financier.
At the same time investments in the banking sector, the regulator intends to limit from 1 July 2018) maximum investment of pension savings in banks should be reduced from 40 to 25%. In addition, investments in assets of a group of related legal entities cannot be more than 15% of the portfolio of NPF. Until January 1, 2019, the funds will also need to get rid of bonds without credit ratings.
