On May 15, 2013 the Government of the Russian Federation issued a Decree No. 421 “On Amendments to Paragraph 1 of the Decree No. 379 of the Government of the Russian Federation, as of June 30, 2003”1 (hereinafter – the “Decree No. 421”). The Decree contains an amendment that provides more opportunities for pension savings funds investments and introduces technical amendments related to bringing the terminology in compliance with the Federal Law № 325-FZ “On Organized Trading” as of November 21, 2011.
The Federal Law No. 111-FZ as of June 24, 2002 “On Investment of Funds to Finance the Accumulative Part of Pension in the Russian Federation” provides a list of permitted assets (investment objects) to invest pension savings. It is prohibited to invest pension savings funds in other investment objects not expressly provided by the Federal Law. In addition, the Government of the Russian Federation may impose additional limitations on the investment of pension savings funds in certain asset classes permitted by the Federal Law. In exercising this right, Russian Government has adopted a Decree No. 379 “On Additional Limitations on Investment of Pension Savings Funds in Certain Asset Classes and Determination of the Maximum Share of Certain Asset Classes in the Investment Portfolio in accordance with the Clause 26 and the Clause 28 of the Federal Law “On Investment of Funds to Finance the Accumulative Part of Pension in the Russian Federation”, as of June 30, 2003, and with the Clause 36.15 of the Federal Law “On Non-State Pension Funds” (hereinafter – the “Decree No. 379”).
The previous version of the Decree No. 379 provided that transactions on investment of pension savings funds in securities being offered shall be implemented through securities market trading organizers on a delivery-versuspayment basis. Subject to amendments introduced by the Decree No. 421, transactions on investment of pension savings funds in securities being offered on the securities pre-delivery basis by a counterparty can be also implemented in the over-the-counter market.
This amendment will allow to expand the list of securities for pension savings funds investment purposes. It might lead to the raise of pension funds profitability level, on the one side, and to the so called “long money” being brought into the economy, on the other side, which may contribute to its sustainable development.