Bank of Russia simplifies NPFs’ participation in IPOs
Non-governmental pension funds (NPFs) will be able to purchase issuers’ shares as part of an initial public offering (IPO) if their aggregate value in on-exchange trading is at least ₽3 billion. Previously, the estimated threshold value for NPFs to participate in IPOs was ₽50 billion.
The Bank of Russia ordinance regulating the investment of pension reserves comes into force on 13 October 2024. A similar procedure regarding pension savings is already in force.
The portion of shares which NPFs will be able to purchase has increased from 5% to 10% of the overall offering.
Moreover, NPFs are allowed to use pension reserves to purchase individual derivatives in the over-the-counter market with the central counterparty.
The new rules expand NPFs’ investment opportunities. In turn, the participation of institutional investors in IPOs will encourage public offerings of shares in the Russian market.