On amendments to the Law on investment partnership

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News for those who are interested in the creation of investment funds in Russia and the development of the institute of investment partnerships. The State Duma adopted in the third reading a bill that amends Federal Law No. 335-FZ "On Investment Partnership". At the moment, the bill is under consideration in the Federation Council.

We will briefly tell you about the key changes:

1. Currently, the Investment Partnership Agreement (IPA) can be certified at the location of any partner during its conclusion. There is no longer an imperative requirement for notarization of the contract at the location of the managing partner. At the same time, any additional agreements to the IPA, as well as transactions with shares in the common property of the partners, must still be certified by the notary who originally certified the IPA.
2. It is explicitly provided for the possibility of distributing shares in the common property of partners disproportionately to the value of their contributions to the common cause.
3. The IPA may provide for a special procedure for making decisions by partners, including one that does not comply with the provisions of the Civil Code of the Russian Federation on the procedure for holding meetings and making decisions by them (we assume that it is now possible to refuse to hold meetings and draw up protocols. Decisions can be made by exchanging letters/by e-mail/via a mobile application and by other means, if it is possible to identify the person expressing his will).
4. The restriction on the number of partners under the IPA has been lifted (previously, the number of partners under the IPA shall not exceed 50).
5. It is clarified that in the event of a change in the composition of members in an investment partnership (IP), it is not required to obtain the consent of IP counterparties (including under corporate contracts), and it is also established that in such cases the rules on the pre-emptive right to purchase shares (shares in the authorized capital) owned by IP are not applicable.
6. And finally, now it will be possible to establish an IP with separate property (analogous to foreign companies with segregated portfolios). Such an IP can be established if the managing partner is the management company of the RPIF or its subsidiary or dependent company or another person approved by the Government of the Russian Federation. We hope that this is a temporary measure and in the future the opportunity to create IP with separate property will be provided to all market members.

Features of IP with separate property:

  • the common property of partners of this type can be divided into two types: joint property (formed from the contributions of all partners) and separate property (formed from the contributions of individual partners). The number of "cells" or "portfolios" (separate assets) is unlimited;
  • the share of each partner is determined separately for the joint property and each of the separate assets, based on the size of the contribution of the partner to the corresponding property;
  • transactions in respect of joint property and separate property are carried out separately, and obligations arising from such transactions will arise either for all partners or for fellow depositors in separate property, respectively;
  • the partners are liable within the limits of their share in the separate property and only for those obligations that have arisen from transactions in respect of such separate property;
  • expenses related to joint property and separate property are maintained separately;
  • the profit in respect of the detached property is distributed among the fellow depositors in such separate property.

With the help of such a tool, the RPIF plans to establish "funds of funds".

Unfortunately, the draft law does not reflect such needs of the investment market as the possibility of participation in IPA of individuals recognized as qualified investors, other IP, educational institutions, the resolution of a conflict concerning the introduction of the results of intellectual activity into the common property of partners, the need to cancel the deadline for the validity of IPA, the need to eliminate uncertainty about the possibility of investing IP in securities of foreign issuers. Also disappointing is only a half-hearted solution to the problem of "notary slavery" of the members of the IPA. The binding to one notary remains throughout the entire period of IP activity, there is only a slightly greater freedom of choice of a notary who can initially certify the IPA.