remained to the owners of non-state pension funds for investment results

The Central Bank announced the start date for the law on the responsibility of NPF owners for the results of investing pension funds. They have only a year left of their “easy life.” How difficult the future outlined by the regulator will become will depend on the practical use of the new norms by the Bank of Russia.

Photo: Gleb Shchelkunov, Kommersant / buy photo

Philip Gabunia, Director of the Department of Collective Investments and Trust Management of the Bank of Russia, announced today the timing of holding NPF shareholders accountable for the results of work with pension funds. “The Central Bank expects that the law on the responsibility of shareholders of non-state pension funds for investment results will come into force in 2016,” the Interfax agency quotes it. Until now there has been no specific date.

How pension funds recovered from failure

However, even now there is still no final clarity. “We hope that amendments to the legislation will be adopted in February; as a first approximation, we have agreed on the text with the main participants,” said Mr. Gabunia. The bill is under consideration by the Russian government. The system, according to a representative of the regulator, will work like this: “If a non-state pension fund cannot explain why, acting in the interests of clients, it bought a high-risk asset with a low yield, and we can calculate that at the time of purchase it could have bought something less risky and more profitable, then he will have to pay the difference out of his own pocket.”

However, he hastened to assure the market that this mechanism will be used only in unambiguous situations, but not in ambiguous ones. In addition, the law will traditionally not have retroactive effect and the owners of non-state pension funds will be responsible only for the results of new investments.

At the same time, not only the results of investing in fixed income securities, but also in shares will be subject to analysis by the regulator. Here the duality of conclusions is evident. “With stocks it’s more difficult. There is a more complex calculation. We assume that the participant is in good faith; we cannot suspect that any transaction is being carried out in violation,” confirmed Mr. Gabunia.

However, until the market sees how the new norms are applied in practice and how objective the Central Bank’s approach is, it is too early to assess their impact on the market, its participants believe.

Finance department

Pension funds will introduce derivatives

The regulator is ready to allow non-state pension funds to enter the derivatives market, First Deputy Chairman of the Central Bank Sergei Shvetsov said at a conference on derivatives on November 11. “They have long-term money. Their real value must be preserved. Therefore, funds can use interest rate derivatives and hedge their long-term obligations by selling a fixed rate and buying a floating one,” explained Mr. Shvetsov. We are not talking about speculative operations, which are traditionally associated with the derivatives market, he emphasized. “We need to agree with the NPF on the scale and restrictions. For example, in terms of portfolio volume,” explained Sergei Shvetsov. Read more

A year of irresponsibility