Anton Tabakh: Increasing the Investment Appeal of the Far East

The placement of SNs under the Russian law can be incentivized by the introduction of access criteria for non-qualified investors. Federal Law 75-FZ introducing SNs in the Russian securities market entered into force in October 2018. The SNs novelty rests in that under certain circumstances, specified in issue documents, their issuer is allowed to pay the note holders less than the face value of the notes. Those circumstances include a range of triggers, such as changes in the costs of goods and securities, currency exchange rate, interest rates, official statistic data, inflation rate, etc. Circumstances determining the payments to note holders also include the default by corporate, sovereign and municipal entities (reference entities), which laid the groundwork for the issuance of Russian CLNs.

So far, there have been no SN offerings under the new law. Structured products (including those originated in overseas jurisdictions) were available to Russian investors previously. The notion of a ‘structured instrument’ is broader than that of a ’structured note’. Structured products include not only instruments that do not guarantee the face value of a note, but also those that protect the investors’ capital against loss (the so-called investment bonds). The latter entitle their holders to claim from the issuers the repayment of their face amount, a minimal fixed-rate coupon and additional sums (depending, e.g., on prices for some assets. Typical examples of these products are deposits and bonds whose issuer has a sovereign-grade rating, which also contain a derivative component (a put option on some asset).The embedded derivative component allows a higher yield, while the interest income on the note ensures the repayment of the face amount.

On June 30, 2019, there were 168 structured instruments issued by Russian market participants, including capital-protected products, , equivalent to around $2.15 billion, of which 109 issues ($90.366m) were denominated in rubles, 52 ($654.7m) in US dollars, and 7 ($71.6m) in euro.

The World Bank has published detailed information on how Russia is addressing the coronavirus challenges, what more could be done, and how other countries are dealing with the pandemic.

The article examines the country’s acute economic problems and substantiates the need of socio-economic development acceleration, discusses ways to achieve national development goals, and shows that national projects are important, but not the only mechanisms for achieving them. The urgent need for the formation of a full-fledged comprehensive Strategy for the socio-economic development of the country for the prospective period, as well as the available experience in developing strategic documents at the federal and regional levels, have been identified. Attention is paid to the experience of strategic development planning in St. Petersburg. The urgent need to create incentives for business development and the formation of a favorable investment climate has been identified. The article defines methods for enhancing the mechanisms for the implementation of national and regional development projects and programs, including specific methods for achieving the goals, such as conducting continuous monitoring of their achievement, using methods of foresight, regulatory guillotine, triple helix, etc.

The third report issued by RVC in collaboration with the Ministry of Economic Development of Russia and the Government Expert Council covers the topic of attracting investments to the innovative sector of Russia’s economy via venture capital market tools.