ITI Funds is preparing to shut its ETF business following months of restrictions to Russian assets and the suspension of its two ETFs.
The multi-asset investment platform has called an extraordinary general meeting (EGM) on 16 September to “dissolve” its ETF platform, the ITI Funds UCITS ETF SICAV.
Should the motion to liquidate the platform pass, ITI Funds said the UCITS ETF platform would be shut with immediate effect, ending the firm’s involvement in ETFs.
ITI Funds said: “The directors of the company wish to announce that the EGM of the company will be reconvened, to be held, without a physical presence of shareholders…on 16 September.”
The announcement comes after an EGM was held on 22 August which was set to ask shareholders whether the firm should dissolve its platform with immediate effect, appoint Me Business Solutions to carry out the liquidation, discharge the company directors and instruct KPMG and other auditors to issue a report on the liquidation.
However, the meeting did not meet the required threshold of shareholders representing at least 50% of the firm’s capital to be present. They, in turn, would have needed to vote at least two-thirds in favour of the decision to dissolve its ETF platform.
No threshold of shareholder attendance will be required at the EGM on 16 September.
ITI Funds declined to comment on the liquidation process or whether majority owner Da Vinci Capital had attended the EGMs.
The move follows the ITI's decision to suspend creations and redemptions on its two ETFs, the ITI Funds RTS Equity UCITS ETF (RUSE) and ITI Funds Russia-focused USD Eurobond UCITS ETF (RUSB), on 1 March after the closure of the Moscow Exchange “severely” impacted liquidity before exchanges ended trading of Russian securities altogether.
Two months later, ITI Funds board member Natalia Petrova resigned for “business reasons” after just 13 months. On 9 May she was replaced by Oleg Jelzko, founder of Da Vinci Capital.
As the firm’s ETFs remained suspended, it made a statement on 18 July that “various sanctions” and restrictions applied by counterparties “makes it impossible” for its ETFs to resume trading or to calculate the value of their holdings.
Less than a month later, ITI Funds proposed terminating its two ETFs following a separate extraordinary general meeting (EGM) held on 22 August.
Invesco and BlackRock have also shut their Russia ETFs in recent months after prolonged suspensions.
DWS, HSBC Asset Management and Amundi’s Russia’s ETFs remain online but are suspended from trading.