Bank of Russia approves new green securities issuance rules
Issuers will be able to label their bonds as green if these papers are used to raise money for projects which are green according to both the Russian taxonomy and international standards. These amendments to the Securities Issue Standards have been registered by the Russian Ministry of Justice.
The establishment of the national verification system made it possible to relax the terms of issuance for green and social bonds. Now, issuers may outline the consequences of inappropriate use of raised investment in the prospectus themselves. The right to demand the early redemption of bonds is no longer mandatory. By inserting corresponding provisions in their funds management policies, issuers will be able to use the funds raised from the placement of bonds before their allocation to green projects.
Also, the amendments to the Securities Issue Standards are to align them with the international sustainability bond guidelines. Under the amended rules, it is permitted to verify not only a particular project but the investment policy of an issuer where no specific project has been selected prior to the issuance.
Issuers will be able to label their bonds as sustainable ones in the issuance decision and prospectus. Such bonds may be issued as part of the targeted allocation of raised funds both to green and social projects subject to the applicable eligibility criteria.
The document takes effect on 23 November 2021.