Guarantee system for type 3 IIAs
A guarantee system for assets held in type 3 individual investment accounts (IIAs) will be introduced in Russia. It will guarantee compensation of assets held in the accounts of professional participants in case of their bankruptcy. The law to this effect has been passed by the State Duma.
The compensation fund will be formed from voluntary contributions of professional participants maintaining IIAs who have joined the guarantee system. The system will be operated by the currently existing Federal Public-State Foundation for the Protection of Investors’ and Shareholders’ Rights, which will be renamed the Individual Investment Account Guarantee Fund. It will determine the amount of contributions and make compensation payments.
Affected investors will be able to contact this fund if they have not received their assets in full within six months after a professional participant was declared bankrupt and bankruptcy proceedings were initiated. The maximum compensation amount will be ₽1.4 million for all accounts opened by the bankrupt.
The law sets out specific aspects of participation in the guarantee system and the procedure for setting up the compensation fund and investing its resources. It also establishes requirements for the structure and powers of the system operator’s management bodies.