The exchange traded fund industry will now open in Russia, due to recent changes in legislation. Local fund providers see this as a welcome change, as these highly liquid products will have a positive impact on various investment houses.
“Experts say that the new legislation is set to attract more private money into the Russian market, as ETFs are particularly attractive for private investors. On top of liquidity, they also offer higher levels of investor protection, since they are usually subject to rigorous regulation,” Anna Federova for InvestmentEurope wrote.
The Russian State Duma recently passed legislation that allows Russian investment managers to create ETFs. All investment products currently trading in Russia are open-ended or closed-end funds.
Furthermore, institutional investors are quick to use ETFs because of the product transparency. According to State Street Global Advisors, this allows quick and seamless moves within various allocations. [Hong-Kong Listed China A-Shares ETF Launches]
Adding ETFs to Russian markets will bring them into the competitive, global ETF marketplace.
In Russia, there will be an institute of stock market makers that will be formed to oversee the trading and creation/redemption process.
Tisha Guerrero contributed to this article.