NPFs to have more opportunities to participate in IPO
The Bank of Russia updates the requirements for investing pension savings in shares of Russian joint-stock companies in the case of initial public offerings. The draft ordinance has been released for public consultation.
It provides that non-governmental pension funds (NPFs) will be allowed to purchase the issuer’s shares if their aggregate value, when they are traded on exchanges, is no less than ₽3 billion (now, the threshold is ₽50 billion). The ordinance also proposes an increase from 5% to 10% in the proportion of shares in the total volume of exchange-traded shares that an NPF is allowed to purchase.
Furthermore, the Bank of Russia allows NPFs to invest pension savings, similarly to pension reserves, not only in shares from the MOEX Russia Index and the first quotation list, but also in other Russian shares. Now, NPFs are prohibited from making such investments. However, NPFs will be entitled to purchase such shares only within a single 7% limit on assets with an additional level of risk. Besides, the Bank of Russia will make sure that pension savings are invested only for the benefit of clients.
These changes will allow NPFs to expand their investment opportunities. The participation of institutional investors will encourage new public offerings of shares in the Russian market.