The Central Bank of Russia has published a consultation paper on development scenarios for the retail unit investment funds (UIFs) market, drawing on supervisory practice, international approaches and market proposals. The paper invites discussion on broadening eligible assets for retail UIFs, revisiting approaches to financial leverage, considering fund-of-funds structures, and shortening settlement timelines for unit issuance, redemption and exchange. On investment opportunities, the regulator suggests expanding the range of unlisted securities that retail UIFs may buy within a defined limit and potentially adding digital financial assets (DFAs), subject to creating a legal framework and procedures for separate accounting and custody, with retail UIF investment in DFAs only permitted after a transitional period. For leverage, it notes proposals to encourage leveraged UIFs in Russia while highlighting investor-protection needs, given that financial leverage for UIFs sold to non-qualified investors is currently capped at 20% of net asset value, with a possibility to raise the threshold to 40% due to market factors. The paper also flags the need for a comprehensive review of fund-of-funds concepts, as Russian rules currently prevent a management company from buying units of one UIF it manages into another UIF it manages, while international practice includes master-feeder structures. Separately, it considers reducing the typical one to four business day processing period for open-end UIF unit issuance, redemption and exchange to same-day completion. Feedback on the consultation paper is open through 1 September 2025.

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