Vnesheconombank hopes be able to invest pension savings in Russian eurobonds through Euroclear

Saturday, January 16, 2021

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Vnesheconombank (Foreign Trade and Investment Bank), operating as the state-run pensions management company, hopes be able to invest pension savings in Russian eurobonds through Euroclear, an international clearance and settlement system. "Vnesheconombank has submitted for government consideration a proposal to amend a relevant resolution which would authorize the bank to invest pensions in Euroclear," said VEB chief Vladimir Dmitriev, now on a visit in Washington. "There is an understanding on this issue between all interested departments." Euroclear is the world's largest clearance and settlement system for internationally traded securities, including Russian eurobonds. Vnesheconombank opened direct Euroclear accounts at the end of 2000. Though it is formally entitled to invest pension resources in Russian eurobonds, the bank does not actually exercise this right because it does not have a permit to buy securities at a stock exchange trading eurobonds off the offering list. In the course of the pension reform in 2003, about 55 non-state management companies gained control of 1,500-2,000 million rubles ($1 is 29.22 rubles) worth of pension savings from 2% of the population. More Russians failed to choose any of the non-state management companies and their pension reserves were transferred to Vnesheconombank. According to Mr. Dmitriev, about 50 billion rubles in pension funds were placed under the bank's management in 2003. In his opinion, low interest in private pension funds in Russia is because of a lack of promotion. "I would like our private management companies to show a more effective use of pension funds," he said. "Limited information has resulted in Vnesheconombank accepting the money of those who said nothing." Mr. Dmitriev said that only "a narrow circle of people who can invest large sums in such funds" know about investment funds.

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