How NPFs will manage conflicts of interest: Bank of Russia requirements
From 1 January 2025, non-governmental pension funds (NPFs) will be obliged to identify and manage conflicts of interest. However, the funds will be able to allow them only if this does not violate the clients’ rights and they have been informed about the conflict of interest. The above provisions are set out in the Bank of Russia draft ordinance published for public consultation.
The document stipulates the rules for identifying conflicts of interest and describes specific situations that may cause them — for example, when an NPF acquires securities of an affiliated company or performs a transaction with a related party. Funds will be obliged to maintain records of the information about conflicts of interest.
The requirements for NPFs are similar to the approaches to regulating conflicts of interest involving professional participants and management companies and are aimed at enhancing the protection of the rights and lawful interests of their clients.
Please send your feedback on the draft ordinance to the Bank of Russia through 28 June 2024.
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