The Bank of Russia has highlighted key aspects of managing individual investment accounts (IIAs) for professional market participants. As of the beginning of 2024, only type 3 IIAs can be opened without limiting investment amounts and for a period ranging from five to ten years, depending on the year the agreement is signed. Type 1 and type 2 IIAs opened before January 1, 2024, will continue under their original terms. However, it is prohibited to hold both old- and new-type accounts simultaneously.
Investors have the option to transform their older IIAs into new ones. In such cases, the period of ownership by the investor—up to three years—will be recognized. These transformed IIAs will be subject to new rules, including applications for tax deductions and payments due on securities.
The regulator clarified that returns on securities recorded in a type 3 IIA may only be credited to this account; transferring these payments to other accounts, such as a client’s bank account, is prohibited. If an investor withdraws all or part of the funds from the IIA, the agreement will be canceled and all tax benefits lost. An exception exists for situations where funds are needed for expensive medical services approved by the Russian Government.
For old-type IIAs, income payment procedures on securities may still be stipulated in agreements with brokers or trust managers.
Additionally, starting January 1, 2024, no foreign financial instruments may be purchased using any type of IIA. This ban does not apply to previously purchased foreign assets and does not prevent investors from transforming their IIAs.
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