On setting long-term solvency ratings to calculate management companies’ equity capital

The Bank of Russia Board of Directors decided to set the following long-term solvency ratings:

for the purposes of Paragraphs 2 and 3 of Clause 2 of Ordinance No. 4075-U, dated 19 July 2016, ‘On the Requirements for Equity Capital of Management Companies of Investment Funds, Unit Investment Funds and Non-governmental Pension Funds and Applicants for a Management Company Licence’ registered by the Ministry of Justice of the Russian Federation on 15 August 2016, registration No. 43234 (hereinafter, the Ordinance) the long-term solvency rating of credit institutions by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by the respective rating agency downgraded by two notches;

for the purposes of Paragraph 4 of Clause 2 of the Ordinance the long-term solvency rating of a bond issue (when there is no issue rating — issuer’s or warrantor’s (guarantor’s) rating) by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by the respective rating agency downgraded by three notches or be at least А++ by the national scale by Expert RA rating agency classification;

for the purposes of Paragraph 7 of Clause 2 of the Ordinance the long-term solvency rating of a debtor by classification of at least one rating agency (Fitch-Ratings, Standard & Poor’s, Moody’s Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by the respective rating agency downgraded by two notches.

For the purposes of this decision the following types of ratings by foreign rating agencies are used:

Fitch Ratings — issuer default rating, corporate finance obligations rating, and long-term rating of structured finance, project finance and public finance obligations;

Standard & Poor’s — issuer credit rating and long-term issue credit rating;

Moody’s Investors Service — issuer rating, corporate family rating, structured finance issuer rating, long-term corporate obligation rating, structured finance long-term rating, and bank deposit rating. Corporate family rating applies to an entity only when such rating is assigned directly to this entity.

For the purposes of this decision a rating notch shall mean the one-level difference on a rating scale expressed with numbers and symbols (‘+’, ‘-‘, 1, 2, 3).

This decision becomes effective the day it is posted on the Bank of Russia website.

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