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ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of February 28, 2017 No. 129

About approval of Rules of management of means of the pension accruals created for benefit of the insured persons which did not use option of managing company, Social fund of the Kyrgyz Republic

(as amended on 11-02-2022)

For the purpose of creation of necessary conditions for management of means of pension accruals, according to article 5 of the Law of the Kyrgyz Republic "About investment of means for financing of investment part of the state pension on the national social insurance in the Kyrgyz Republic", articles 10 and 17 of the constitutional Law of the Kyrgyz Republic "About the Government of the Kyrgyz Republic" the Government of the Kyrgyz Republic decides:

1. Approve Rules of management of means of the pension accruals created for benefit of the insured persons which did not use option of managing company, Social fund of the Kyrgyz Republic according to appendix.

2. This resolution is subject to official publication and becomes effective since January 1, 2017.

Prime Minister

S. Zheenbekov

Appendix

Rules of management of means of the pension accruals created for benefit of the insured persons which did not use option of managing company, Social fund of the Kyrgyz Republic

1. Basic provisions

1. These rules determine procedure and the basic principles of management of means of the pension accruals created for benefit of the insured persons which did not use option of managing company, Social fund of the Kyrgyz Republic (further - Rules).

2. The social fund of the Kyrgyz Republic (further - Social fund) manages means of pension accruals only for the benefit of insured persons, according to these rules and the legislation of the Kyrgyz Republic, proceeding from need of ensuring the principles of diversification, reliability, liquidity, profitability and recoverability.

3. The social fund bears responsibility for accomplishment of functions under management of means of pension accruals according to these rules.

2. Requirements to structure of investment portfolio

4. Means of pension accruals can be placed in:

1) government securities of the Kyrgyz Republic, in the amount of no more than 85 percent of cost of pension accruals;

2) bonds with providing (mortgage), issued by issuers of the Kyrgyz Republic according to the legislation of the Kyrgyz Republic, in the amount of no more than 10 percent of cost of pension accruals. At the same time means of pension accruals are allowed to be placed in the bond of one issuer, in the amount of no more than 5 percent of the pension accruals provided by this subitem;

3) term deposits in credit institutions, in the amount of no more than 35 percent of cost of pension accruals. At the same time means of pension accruals can be placed in deposits of one credit institution, in the amount of no more than 20 percent of the pension accruals provided by this subitem;

3-1) term deposits in credit institutions in foreign currency of the countries of Organization for Economic Cooperation and Development (OECD) in the amount of no more than 5 percent of cost of pension accruals. At the same time means of pension accruals can be placed on deposits of one credit institution in foreign currency in the amount of no more than 15 percent of pension accruals and in one foreign currency no more than 50 percent of cost of the pension accruals provided by this subitem;

4) bonds of local government bodies of the Kyrgyz Republic in the amount of no more than 10 percent of cost of pension accruals;

5) the mortgage securities issued by authorized body in the sphere of mortgage housing lending in the amount of no more than 1 percent of cost of pension accruals.

5. Investment of funds of pension accruals in other objects of management, not stipulated in Item 4 these rules is not allowed.

Also investment of funds of pension accruals in objects of management, except for government securities, stipulated in Item 4 these rules which annual profitability is lower than discount rate of National Bank of the Kyrgyz Republic at the time of decision making about placement is not allowed.

6. Means of pension accruals cannot be used for:

1) acquisitions of securities which issuers are managing companies, brokers, credit and insurance companies, depositary and auditors with whom service agreements are signed;

2) acquisitions of securities of issuers concerning which insolvency proceeding is initiated;

3) acquisitions of securities which issuers are the legal entities registered in offshore zones or having as members of shareholders and affiliates, the legal entities registered in offshore zones or the physical persons living in the territory of offshore zones or being shareholders (participants) of the legal entities registered in offshore zones.

7. Means of pension accruals are not subject to withdrawal in republican and local budgets, cannot be subject of pledge or other providing owner liabilities of the specified means and subjects of the relations of forming and investment of means of pension accruals, and also other participants of process of forming and investment of means of pension accruals.

8. Audit of activities of Social fund for management of means of pension accruals is performed according to the Law of the Kyrgyz Republic "About Social fund of the Kyrgyz Republic".

3. Selection criteria of credit institutions for investment of funds of pension accruals

9. Selection criteria of credit institutions for investment of funds of pension accruals on term deposits:

1) availability at credit institution of the corresponding license of National Bank of the Kyrgyz Republic for the right of carrying out banking activities, including attraction of term deposits from physical persons and legal entities;

2) observance of the economic standard rates and requirements established by National Bank of the Kyrgyz Republic, and also provisions of the Law of the Kyrgyz Republic "About counteraction to financing of terrorist activities and to legalization (washing) of the criminal income" on all reporting dates (monthly) within 12 months preceding date of application for acceptance of term deposit deposit;

3) implementation of profitable activities in the last two years;

4) availability of the conclusion of the external auditor without clauses confirming compliance of accounting and the reporting to the established standards of the accounting and financial reporting in two last years preceding date of application for acceptance of term deposit deposit;

5) absence outstanding and arrears to National Bank of the Kyrgyz Republic, and also to other creditors and partners on the last reporting date preceding date of application for acceptance of term deposit deposit;

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