Tighter capital and quorum rules proposed to protect bondholders
The Bank of Russia has published a consultation paper proposing stricter eligibility requirements for bondholder representatives and flexible quorum thresholds for bondholder meetings. Market participants have until September 15, 2026, to submit comments on the proposed framework.
Raising the bar for investor agents
The Bank of Russia intends to reform the bondholder representative framework by raising market entry criteria.
Under current regulations dating back more than a decade, any entity operating for three years can act as a representative.
The proposal introduces mandatory minimum authorized capital requirements and formal business reputation standards for both executives and operational staff.
Furthermore, entities inactive for two consecutive years will be removed from the central bank's official registry.
To eliminate structural conflicts of interest, issuers and their affiliated entities will be barred from serving as representatives.
The regulator also plans to expand the statutory categories of bond offerings that mandate designating a representative.
Unblocking collective restructuring votes
Current rules require major resolutions, including debt restructurings, to secure approval from a three-quarters supermajority of all bondholders.
In issues dispersed across thousands of retail and institutional investors, reaching this threshold often proves unfeasible during issuer distress.
The central bank plans to replace this absolute majority rule with a formal meeting quorum.
If an initial general meeting fails to reach the required participation, a reduced quorum mechanism will apply to subsequent votes to prevent restructurings from stalling.
Fixing a decade of passive oversight
Easing meeting quorums resolves a bottleneck that routinely paralyzed corporate restructurings.
Banning affiliated agents directly addresses long-standing conflict-of-interest loopholes.
Real investor protection will ultimately hinge on rigorous enforcement of capital standards.