Duma considers bill on target capital of CSOs (NGOs)
State Duma adopts in the first reading a bill on the target capital of CSOs
18 February 2021
The draft legislation expands the list of assets in which CSO target capital may invest.
On 17 February, the State Duma adopted in the first reading a bill introducing amendments to the Federal Law on Procedure for Forming and Use of Target Capital of Non-Profit Organisations.
The amendments expand the list of assets into which money from CSO target capital may be invested. The new list includes stocks & shares investment funds and general collateral certificates.
According to one of the authors of the bill, chairman of the Committee on Financial Markets, Anatoly Aksakov, this will provide “more opportunities to invest funds and more liquidity while implementing trust management of target capital wealth”.
The legislation concerns the authority of the Bank of Russia. It must now establish requirements to mitigate risks when concluding agreements with management companies implementing trust management of target capital, as well as procedures for calculating the value of net assets located in the trust management of the management company of the target capital.
“The bill proposes to exclude the jurisdiction of the Bank of Russia in the regulation of separate private aspects of the activity of management companies of target capital, including them in the conditions of the trust management agreement between the founding member of the trust management and the management company of the target capital”, explained the State Duma specialist committee.
The bill also establishes that the expenditure associated with the trust management of wealth from target capital is limited by the percentage of the average value of the net assets.