The way has been cleared for Russian asset management companies to launch mutual funds that only invest into foreign assets and the first may appear next year. Managers are only waiting for the Russian stock market regulator, the Federal Financial Markets Service, to sign off on the draft law. The push for the all-foreign funds has come from market participants. Russian mutual funds are already allowed to invest in foreign securities, but the rules are so complicated that few do in practice. The regulator approved an order that will put Russian mutual funds on an equal footing with foreign funds working in Russia and make it significantly easier for Russian funds to invest abroad. The move has been partly prompted by the relative underperformance of the domestic indices compared to other emerging markets. The RTS index has risen 12 per cent since the beginning of the year, while the Chinese Composite index has risen 87 per cent. Russia's mutual funds have been experiencing a record capital outflow in the last few months, with October alone seeing an outflow of $250 million. The biggest losses were sustained by Uralsib funds, which saw more than $140 million withdrawn, while Troika Dialog lost about $60 million. Western fund houses, such as Societe Generale Asset Management and Pioneer Investments, are soon to begin offering mutual funds in Russia.