Late last year, significant changes to Russia's
securitisation market legislation came into force with the
introduction of structured bonds – a new type of security.
While regulatory issues are yet to be ironed out, these bonds seem
likely to meet growing investor demand.
On 16 October 2018, a series of amendments to Russia's
Federal Law No. 39-FZ took effect. The law was supplemented by a
new article regulating the issue and circulation of structured
bonds. This financial instrument can be issued by banks, brokerage
and dealer firms, and special purpose vehicles (SPVs).
A structured bond is a debt obligation containing an embedded
derivative component that adjusts the security's risk/return
profile. The return performance of a structured bond will track the
underlying debt obligation and the derivative embedded within
it.
