The Russian government has signaled the introduction of a fresh instrument into circulating securities. In a briefing to the Cabinet, President Vladimir Putin, speaking with First Deputy Prime Minister Andrei Belousov, outlined the concept and its potential effects on the domestic and international markets.
Officials described the instrument as a new class of convertible security. It would allow the issuer to issue preference shares that may convert into voting ordinary shares when specified events occur. The proposed design aims to give investors a clear path to upside while preserving a defined risk profile, particularly in scenarios tied to the issuer meeting certain conditions.
As explained by the administration, a key event trigger could be the non-payment of income on these securities. This mechanism would activate automatic conversion, removing the need for the issuer’s explicit consent at the moment of conversion and providing a built-in safeguard for investors through automatic adjustment of equity rights.
The leadership stressed that such securities are intended to bolster investor confidence by ensuring that the conversion process is automatic and transparent. By eliminating discretionary steps at the point of conversion, the policy seeks to create a more predictable investment experience, which could appeal to both domestic participants and international buyers seeking stable, rule-based instruments amid evolving market conditions.
Separately, on March 28, Prime Minister Mikhail Mishustin announced at a strategic session focused on financial sovereignty that studies are examining the issuance of federal loan bonds known as OFZ in the currencies of partner countries. The discussions are part of broader efforts to diversify access to Russia’s capital markets and to strengthen the infrastructure that supports national indicators and foreign participation. These moves are being considered as part of a larger push to expand financial integration with friendly economies and to improve the ease with which foreign investors can participate in Russia’s debt markets. (Source: Kremlin press service)