“Aton” said goodbye to the funds

The Central Bank registered the results of the liquidation of 15 exchange-traded funds focused on foreign ETFs. This put an end to the procedure for closing funds, which was initiated last summer by Aton Management. The remaining management companies (MCs) are not ready to liquidate such funds and are trying to reorient them towards internal infrastructure. But with blocked funds, whose foreign assets are in the NSD, the management companies will be able to work only in the second half of the year, after such assets are allocated to special closed-end mutual funds.

On March 10, the Central Bank approved a report on the termination of the activities of 15 exchange-traded funds (BPIF) managed by Aton Management, which invested in foreign ETFs. The management company announced the decision to liquidate these BPIFs in June 2022 (see Kommersant dated June 29, 2022). The management company took such an unpopular step due to the fact that it could not guarantee customers the opportunity to freely conduct transactions with shares. The decision was made on July 12, the Moscow Exchange announced the suspension of trading in shares of these funds from July 13. According to Kommersant’s estimate, the total net asset value (NAV) of the funds as of the last settlement date amounted to 342 million rubles.

In the next few months, Aton Management sold the ETF shares in the funds’ portfolios and distributed the property among the shareholders. But first, changes were made to the rules of the funds. The currency of monetary compensation was changed from the US dollar to the ruble. The Company has reduced the amount of remuneration for a person carrying out the termination of the activities of the fund from 0.1% to 0%.

Representatives of the Central Bank have repeatedly stated about the high risks of investing in foreign securities (FSB) in recent months. The regulator systematically restricts access to them for unqualified investors. Market participants were also reminded of the high infrastructure risks by being included in the SDN sanctions list of Tinkoff Bank, after which the Moscow Exchange, by decision of Tinkoff Capital Management Company, temporarily suspended operations with its foreign currency BPIFs. General Director of Tinkoff Capital Management Company Ruslan Muchipov said that the company is implementing a number of infrastructural changes and expects a gradual resumption of trading in foreign exchange funds in the coming weeks.

Nevertheless, the market participants interviewed by Kommersant are not yet ready to follow the path of Aton and liquidate funds of foreign assets, and to minimize risks, they are transferring them to the internal infrastructure. “Foreign assets from our mutual funds, which were stored in external infrastructure, were almost all sold back in the summer. Now we fill the funds on the securities market with securities traded on the St. Petersburg Exchange,” said Dmitry Timofeev, CEO of TKB Investment Partners. “Alfa Capital has not yet liquidated any of the existing mutual funds, moreover, last year it decided to unfreeze a number of funds with an insignificant share of blocked assets,” said Nikolai, head of government relations at Alfa Capital Management Company. Shvaikovsky.

Ruslan Muchipov believes that the liquidation or reformatting of the fund makes sense in the event of a decrease in investor interest in such strategies or the impossibility of its further support for reasons beyond the control of the management company. “We do not see the prerequisites for the need for liquidation or reformatting,” he said. “Despite infrastructural risks, quite a lot of clients are showing interest in foreign assets, wanting to diversify their portfolio. For many clients, access to the maximum number of markets is important,” says Andrey Vereshchagin, Director of Sales Support and Customer Experience at BCS World of Investments.

A more serious problem for the market remains a significant part of the still blocked funds, of which, according to Kommersant’s estimate based on Investfunds data, there are more than a hundred. In February, the Bank of Russia approved the requirements for the procedure for creating special closed-end mutual funds consisting of blocked foreign securities. Such securities will be withdrawn from the existing retail mutual funds into closed mutual funds, the shares of which will be issued to all shareholders of the initial fund. It is also possible to change the status of a retail fund to a closed fund. This will allow resuming the operations of those funds where the share of blocked assets is insignificant. In the future, if a cash flow is formed in such closed-end investment funds through the sale of assets or other receipts, it should be distributed among the shareholders.

Vitaly Gaidaev