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March 2016 (published: 30.03.2016)
Number 1(24)
Home > Issue > Special purposefinancial institutes: peculiarities and perspectives of development
Ivanov V.V. , Nurmuhametov R.K.
The paper examines organizational and legal aspects of special purpose financial institutes development in Russia, analogs of Western special purpose vehicle / entity (SPV/SPE). Prior to the end of 2013, when Duma adopted law changes concerning possibilities of foundation specialized financial companies and project financing specialized companies, the most commonly used type of SPV/SPE in Russia had beenthe «special mortgage entity» (a hypothecary agent).The authors regard that the limited authority of mentioned above institutes to conduct business activities, long and costly preparation of a securities issue, interrelations complexity between bond owners and bond issuers are the main reasons of a scarce development of these institutions.. It is noted that the both the specialized financial company/project financing specialized companyand a hypothecary agent are rather similar but there are some considerable differences which refer to the formation and dissolution of management bodies, bond collateral, establishment purposes and types of activity. Thus, the law does not specify the aims of specialized financial company, while the project financing specialized company, in contrast, may be established exclusively for financing long-term (more than three years) investment project. Also, the paper examines deficiencies of the specialized financial companies and the project financing specialized companies. Ways of further elaboration and refinement of the both institutions will be revealed when there is sufficient practical experience in place.
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Keywords: financial institute, hypothecary agent, specialized financial company, project financing specialized company.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336.7
Special purposefinancial institutes: peculiarities and perspectives of development
The paper examines organizational and legal aspects of special purpose financial institutes development in Russia, analogs of Western special purpose vehicle / entity (SPV/SPE). Prior to the end of 2013, when Duma adopted law changes concerning possibilities of foundation specialized financial companies and project financing specialized companies, the most commonly used type of SPV/SPE in Russia had beenthe «special mortgage entity» (a hypothecary agent).The authors regard that the limited authority of mentioned above institutes to conduct business activities, long and costly preparation of a securities issue, interrelations complexity between bond owners and bond issuers are the main reasons of a scarce development of these institutions.. It is noted that the both the specialized financial company/project financing specialized companyand a hypothecary agent are rather similar but there are some considerable differences which refer to the formation and dissolution of management bodies, bond collateral, establishment purposes and types of activity. Thus, the law does not specify the aims of specialized financial company, while the project financing specialized company, in contrast, may be established exclusively for financing long-term (more than three years) investment project. Also, the paper examines deficiencies of the specialized financial companies and the project financing specialized companies. Ways of further elaboration and refinement of the both institutions will be revealed when there is sufficient practical experience in place.
Read the full article
Keywords: financial institute, hypothecary agent, specialized financial company, project financing specialized company.
DOI 10.17586/2310-1172-2016-9-1-47-55