The government passed a long-awaited law on private investment funds Wednesday that it hopes will soak up the 10, 000-ruble privatization vouchers and invest them in shares in privatized companies.


While local brokers said the privatization funds are a good idea, the specifics of the law mean they will have little influence on the privatization process.


Meanwhile, the price of a voucher, whose face value is 10, 000 rubles, jumped at the Russian Commodities and Raw Materials Exchanged from 9, 500 rubles to 10, 500 in trading on Tuesday, Komsomolskaya Pravda reported.


Under a decree signed by President Boris Yeltsin, the Finance Ministry and the State Property Committee will issue licenses for the funds, which will be the only entities allowed to trade in vouchers.


A securities commission will act as a watchdog for the market in voucher securities, with representatives from the State Property Commission, the Finance Ministry, the Central Bank, the Anti-Monopoly Committee and Russian stock exchanges.


The funds are based on the model of Czechoslovakia's privatization, where they were the main force behind privatization. About 72 percent of voucher holders entrusted their vouchers to 436 private investment funds, which promised to buy them for up to 10 times their face value.


But co-chairman of the Russian Federation of Stock Exchanges, Alexander Safaryan, said that while the basic idea of private investment funds was good, the details of the decree were "not in keeping with local conditions".


Safaryan objected to the fact that private investment funds will only be able to own 10 percent of shares in any company and can invest no more than 5 percent of their capital in one company. As a result, they would never have any real influence on the management of the firms they invested in, he said.


He also said that the limitation to small packets of shares in any one company would also have the effect of reducing the price of vouchers.