“It will be possible to transfer pension savings to companies that have a license to manage an investment portfolio, equity capital of at least 3 billion tenge, experience in managing clients' assets over the past three years in the amount of at least 5 billion tenge, as well as having no facts of unprofitable activities in over the past two years,” said Maria Khadzhiyeva during the briefing.
Among the qualitative criteria, as noted by the deputy chairman of the ARDFM, one can single out the absence of violations of prudential standards over the past 6 months, absence of unfulfilled supervisory responses, sanctions, and presence of a major participant in the manager.
Investment risk minimization and portfolio diversification are also provided. The regulator has set the investment limits for pension assets in one issue of financial instruments, no more than 50% for bonds and no more than 10% in shares, as well as financial instruments issued by one organization and its affiliates, no more than 10% of pension assets. For a balanced portfolio of financial instruments by types of currencies, the investment limits denominated in foreign currency are provided for financial instruments, no more than 50% of pension assets. However, the specific limits for pension asset investment in a particular financial instrument will be established by an investment declaration approved by the management company.
Currently, 6 out of 18 management companies with licenses for investment portfolio management meet the approved requirements, they are in particular:
- JSC First Heartland Jysan Invest
- JSC BCC Invest, a subsidiary of JSC Bank CenterCredit
- JSC Halyk Global Markets (Subsidiary JSC Halyk Bank of Kazakhstan)
- JSC Subsidiary of Halyk Bank of Kazakhstan “Halyk Finance”
- JSC First Heartland Capital
- JSC Centras Securities
The list of management companies is published on the Agency's website. The inclusion of management companies in this list does not mean that management companies will provide the management services. The decision is to be made by the company and its shareholders. They need to conclude trust management and custody services agreements in order to transfer pension savings under asset management of these companies. The UAPF publishes a list of management companies on its website, which it has entered into trust management agreements with. The depositors have the right to transfer their savings to the management of these companies.
Depositors can transfer pension savings into trust management from one company to another no more than once a year and return them under control of the National Bank in two years.
“In order to minimize the risks associated with possible losses from pension asset investing, or arising in the course of operating activities, one of the main requirements established by the regulator is the requirement for the equity capital of management companies. Besides, managers of retirement assets will have to ensure a minimum level of return on pension assets accepted into trust. This means that if, based on the results of the assessment period, the management company's return on pension assets is less than the minimum profitability, the company will have to compensate this negative difference at the expense of equity capital. In turn, the minimum level of return will be set at 70% of the weighted average ratio of the nominal profitability of pension assets managed by all private management companies,” Khadzhiyeva said.
According to the UAPF, as of February 1, 2021, 829,368 people with pension savings can use the right to transfer part of their pension savings to the trust of private asset management companies.
It is expected that granting the right of disposal to transfer pension savings to private management will increase the interest of UAPF depositors in managing their savings, stimulate institutional demand for securities of Kazakhstani issuers and have a positive effect on the economy as a whole.
Photos are from open sources.