Pumping a financial account – Newspaper Kommersant No. 54 (7499) dated 03/30/2023
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The White House has formed a package of measures to ensure “financial sovereignty”, which covers five areas of work – from an attempt to restore confidence in the Russian financial market through at least partial disclosure of information by securities issuers to the digitalization of financial transactions. The authorities primarily expect a significant increase in the share of citizens investing their savings in investment products – from the current 21% of savings to 36% – as well as an increase in the capitalization of the stock market from 22% of GDP to 32% – by expanding the “functionality” of securities with the introduction polyvoted and convertible into voting preferred shares.
On Wednesday, March 29, at a meeting with the president, the government presented its vision of a package of measures for one of the priority areas of work for this year – ensuring “financial sovereignty”. How noted First Deputy Prime Minister Andrei Belousov, taking into account the problems in the financial market, five areas were formulated within this block of measures. First of all, the authorities expect to attract citizens’ funds as long-term financing – this is explained by the fact that the level of gross savings is about 30% of GDP (against gross savings of about 22%). “This resource of underutilized savings is the potential for capitalization of the stock market,” he said.
The goal is to increase the share of investment insurance and pension products in citizens’ savings from last year’s 21% to 26% in 2025 and to 36% in 2030. To do this, it is proposed to launch several new tools – a new type of individual investment accounts for individuals with the use of a tax deduction and exemption of income from such investments from personal income tax, a mechanism for shared life insurance and programs for long-term savings of citizens through their voluntary contributions and co-financing from the state, which, as the head of the Ministry of Finance Anton Siluanov specified, it will amount to 36 thousand rubles. per year for the first three years.
The corporate “block” of proposals is focused on two goals: restoring market confidence and expanding the set of investment instruments to increase the capitalization of the stock market from 22% of GDP in 2022 to 26% in 2025 and 32% in 2030.
Thus, the authorities are considering a partial resumption of the disclosure of corporate information by securities issuers – we recall that this requirement was suspended until mid-2023 as a measure to reduce the risk of companies falling under sanctions. Andrei Belousov did not provide details of what data would be disclosed again, noting only that this should be done “very carefully” so as not to “harm companies”, but also allow investors to make investment decisions.
It is also planned to provide a wider functionality to securities – the replication of the instrument of polyvocal shares has been announced (although there are still disagreements with the Central Bank in this part). Now the principle of “one share – one vote” is in force in Russia, an exception is made for “Russian offshores” – special administrative regions, non-public international companies can issue multi-voice shares, and public ones can “save” them after moving from a foreign jurisdiction to the Russian Federation, which is not “break” the existing corporate system. The measure, as follows from the words of the First Deputy Prime Minister, should allow issuers to raise more funds and “retain control over the company.”
The plans also include the introduction of convertible preferred shares, which can become voting upon the occurrence of certain conditions (for example, non-payment of income to the shareholder on them), as an additional guarantee to investors due to the fact that the conversion will be automatic and does not require the consent of the issuer. Separate support is promised to the securities of high-tech companies (apparently, this is due to the ideas of ensuring “technological sovereignty”) – through a reduction in the base for calculating income tax due to the costs of placing securities with a multiplying coefficient.
Other areas include the digitalization of financial transactions and building relationships with foreign investors, including the possibility of removing restrictions for those who have invested in the Russian Federation after the introduction of sanctions, restrictions on the payment of dividends and the withdrawal of investments (see Kommersant dated March 17).
The directions for the development of the financial system announced by the White House should also be harmonized with the actions of the “mega-regulator” in the financial market – the Bank of Russia.
Note that from this point of view, complete independence or at least autonomy in decision-making by the Central Bank should be ensured only in monetary policy (the actions of the Central Bank as an issuing bank), but not in the regulation of the financial market, where the regulator remains essentially part of the extended government. A brief “ideological” look at the strategy of the financial market by the Bank of Russia on Wednesday was presented in the report of the Central Bank for the State Duma for 2022: the commentary to it by the head of the Bank of Russia Elvira Nabiullina is devoted to the other side of the development of the financial market – the removal of the anti-crisis support of the Central Bank of the banking system, building an “independent” settlement infrastructure, easing regulation “for lending to transformational projects” and priority industries, “expanding equity financing” and developing a collective investment market, which is considered by the Central Bank to be “a more difficult task than expanding lending,” but no less important.
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