Belarusian Bonds Included in a Russian Investment Fund for the First Time

For the first time in the history of Russian collective investment market, corporate bonds of a Belarusian issuer were acquired and included in the unit investment fund.

INFINITUM was the first Russian depository to open in 2008 a correspondent account with the Central Depository of the Republic of Belarus for a specific transaction. In view of the current interest of Russian institutional investors in the Belarusian bond market, INFINITUM Asset Services together with Belarusian infrastructural institutions has spent several months to make arrangements to bring all processes and documents in line with their status in 2014. In order to give Russian companies an opportunity to buy Belarusian securities through OTC trading, all necessary modifications were introduced.

‘We are glad cooperative work with Russian colleagues has brought positive results,’ Valentina Timoshenko, Director of the Central Depository of the Republic of Belarus, comments. ‘For several years, the regulator of the securities market in the Republic of Belarus and the Central Depository has been carrying out activities aimed at interaction with the Russian leading depositories in order to arrange mutual penetration in the securities markets of the neighboring countries. Currently, the securities market regulator of the Republic of Belarus is expected to amend the regulations governing transfers of both corporate and government bonds to correspondent depository accounts of non-resident depositories. The interest in the Belarusian issuers’ securities market is a long-awaited event and a good present for the New Year 2015."

The transaction was initiated by EPIO Management Company, which is INFINITUM’s client. The company has already sent the amendments to the NAV Rules (enabling the use of the Belarusian Exchange quotations) to the Bank of Russia for approval. Once the Bank of Russia approves the new Rules, Belarusian securities may be included in Russian investment funds.

‘This transaction is an important step for the development of our management company. One of EPIO’s competitive advantages is its high competence in the post-Soviet countries’ markets, and this precedent opens up new investment opportunities for our clients,’ Vitaly Spiridonov, Director General, said.

In the near future, INFINITUM plans to obtain an authorized depository status, which will allow it to serve, and its customers to purchase government bonds of the Ministry of Finance of Belarus. In addition, the work on settlement of transactions closed on the Belarusian Currency and Stock Exchange is underway.

‘This event can be considered a breakthrough in the functioning of the Russian collective investments market; a specialized depository should be able to perform all the operations clients need to develop investment projects and to implement management strategies, we intend to continue to develop this area comprehensively in other EEA countries too,’ Pavel Prass, Managing Director of INFINITUM, concluded.