Suspension of trading activity for funds with exposure to Russia
02 Mar 2022
We have been advised that a number of funds with investment in companies listed in Russia have taken steps to temporarily suspend either subscriptions, redemptions or both as a result of the sanctions imposed on Russia by the international community, and the suspension in trading of foreign entities invested in Russia by the Russian government.
The situation with Russia is rapidly developing and therefore subject to change at short notice.
We have therefore taken the following actions for the below FPIL investment-linked product ("ILP") sub-fund, whose underlying funds have suspended certain trading activity:
| Affected ILP sub-fund code & name | Effective Date | Action taken | Default ILP sub-fund for redirection of regular premium allocation * |
| R185 - Barings Eastern Europe | 01 Mar 2022 | Suspension of the affected ILP sub-fund to redemptions (switches-out) and subscriptions (switches-in, regular and lump sum payments).
Any regular premiums that were being allocated into the affected ILP sub-fund will now be redirected into a suitable cash fund ("the Default ILP-sub fund") available to the policy with immediate effect *. | R175 – JPM USD Money Market VNAV |
* Please note that if a policy holds 10 ILP sub-funds (the maximum allowed), the premium allocation will instead be redirected in the ILP sub-fund in the policy with the highest value.
At this stage, we do not know how long the suspension will last, but this is being monitored daily.
When an underlying fund to one of our ILP sub-funds suspend publishing a Net Asset Value (NAV), we are unable to accurately price our ILP sub-fund. In these circumstances it may be necessary to price the ILP sub-fund at zero, until the underlying fund starts trading again and we are able to start pricing again.
We have written to impacted policyholders to notify them of the trading suspension and the course of action we have taken in regard to the redirection of their regular premium allocation, if applicable to their policy. A sample of the letter issued can be viewed opposite.
We will write to policyholders again once we have further updates in regard to the suspension.
Notes:
Net asset value, or NAV, represents the value of an investment fund and is calculated by adding the total value of the fund’s assets and subtracting its liabilities. Investment funds use NAV to calculate the price per share of the fund.
