Armenian pension funds may increase investments abroad

YEREVAN, November 23. /ARKA/. The Central Bank of Armenia presented a draft law to the parliamentary committee on financial and budgetary issues, proposing to double the amount of investments that Armenian pension funds can make in other countries

Armen Nurbekyan, Deputy Chairman of the Central Bank of Armenia, reported that currently, pension funds can invest up to 15% of their assets in the economy of a single country. The proposed amendments, however, suggest raising this threshold to 30%. According to the Deputy Chairman, these changes will help diversify investments and improve their efficiency.

In addition, under current legislation, pension funds are not allowed to directly invest in the Armenian economy and must do so through funds registered in the country. The draft law removes this requirement. According to Nurbekyan, this intermediary step was necessary for risk management, but a decision has now been made to offer more flexibility. At the same time, the investment threshold in Armenia, set at 10%, remains unchanged.

In addition, the changes propose allowing pension fund managers to manage other funds. Previously, such a restriction was introduced to ensure that managers focused solely on managing the pension fund and did not take on additional reputational risks.

"This is important, especially considering that fund managers have such 'ambitions' to attract other investors to Armenia and develop the investment environment. It would be a shame if we did not make use of their institutional knowledge," said the Deputy Chairman of the Central Bank.

The changes will also impact the savings fund, which currently has a limit of 25% on investments in stocks and securities. The proposed changes would raise this threshold to 35%. Nurbekyan noted that, compared to international standards, Armenia's approaches are very conservative.

In Armenia, opening and management of participants' pension accounts, issue and redemption of units, as well as other registration operations are centralised and performed by the Central Depository (CDA), which ensures efficiency and cost savings. The CDA also holds the fund's assets. Decentralised asset management is carried out by two international funds: ‘Amundi Acba Asset Management’ and ‘ C Quadrat Ampega Asset Management’, which are licensed and supervised by the Central Bank. -0-

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