07 April 2020
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Investment in securities during the state of emergency – What is new?

Several weeks after the state of emergency was declared, the Serbian Government took some economic measures in addition to the measures imposed to contain the coronavirus epidemic.  One of the economic measures enacted by the Government concerns the Deposit Insurance Agency of the Republic of Serbia („Agency“) and its ability to invest in securities.

For this purpose, the Government issued a Decree on Emergency Investment in Foreign Currency Managed by the Deposit Insurance Agency[1] (“Decree“) on March 25, 2020, which immediately came into force.

Security is a document which bestows property right (real rights or obligation rights) on its holder. It obliges the issuer to fulfill the inscribed obligation to the rightful holder of the security.  The Republic of Serbia can issue securities in RSD, as well as in foreign currency.

The Agency is obliged to keep the resources reserved for the deposit insurance in a special deposit account opened with the National Bank of Serbia. The Agency can then invests funds in debt securities issued by the Republic of Serbia or the National Bank of Serbia, according to decisions of the Board of Directors. However, the Decree regulates some specifics related to investing in the foreign currency funds managed by the Agency, during the state of emergency.

This Regulation stipulates that during the state of emergency, the restrictions set out by the Deposit Insurance Agency Act [2]and Deposit Insurance Act[3] will not apply. The Agency is allowed to invest more than a quarter of its foreign currency funds in foreign currency-denominated debt securities issued by the Republic of Serbia.

The Agency has a prescribed limit on the amount of funds that can be invested in foreign and national securities.  In practice, this means that the Agency can only invest in securities issued by low-risk countries such as Germany, Switzerland or the USA.  The aim of these investments is to create some return on the funds with minimal risk.

Once the state of emergency is lifted, the Agency is obliged to adjust the size of investments of its foreign currency funds back to the relevant percentages prescribed by the regulation. The time period in which this needs to be done is one year from the day the state of emergency is lifted.

Finally, the Deposit Insurance Act prescribes a minimum for cash and deposit investments, while this regulation lifted the limit on investments set by the relevant legislation, allowing the Agency to invest more than the prescribed 25% of its foreign currency funds in securities of other, potentially less risky, countries.


[1] “Official Gazette RS”, no. 42/2020;

[2] “Official Gazette RS”, no. 14/15 i 51/17;

[3] “Official Gazette RS”, no. 14/15, 51/17 i 73/19.


For more information, please contact us via covid19@geciclaw.com.