Sanctions against Moscow Exchange not expected to affect frozen asset swap - Investment Chamber

MOSCOW. June 17 (Interfax) - Russia's Investment Chamber brokerage, which has been mandated to organize the exchange of frozen assets, does not expect a significant impact from sanctions against the Moscow Exchange on the repurchase of foreign securities of Russian investors by non-residents, the brokerage's press service said.

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on June 12 imposed sanctions on Moscow Exchange as well as National Clearing Center (NCC) and National Settlement Depository (NSD).

"NSD was under EU sanctions even before the repurchase transaction began. Moreover, each potential non-resident buyer independently decides whether to participate in the process," the Investment Chamber said.

The movement of foreign securities will take place within the Russian depository infrastructure and in accordance with the regulatory framework of Russian jurisdiction, the press service said. "It is important to note that non-resident buyers do not interact directly with NSD both at the repurchase stage and subsequently when transferring securities to a foreign depository," it said.

NSD will not charge commission for settlements as part of the procedure for repurchasing foreign securities, the Investment Chamber said. "This should provide foreign investors with additional comfort from the point of view of compliance with sanctions regulations. The NSD's role is technical and is to keep records of transactions. Cash settlements during the exchange will take place outside the NSD," the Investment Chamber said.

The Investment Chamber earlier formed 100 lots with an average value of 353.1 million rubles each from applications collected from Russian investors.

The Investment Chamber is collecting applications from non-residents from June 3 to July 5. Settlements are due to take place on July 29.

The Investment Chamber said in April that there was interest from a number of banks and funds from the United States, the European Union, and Britain; with declared demand from these measured in tens of billions of rubles.

Russian President Vladimir Putin in November 2023 signed decree No. 844 on additional temporary economic measures related to the circulation of foreign securities, which establishes the terms and conditions for the exchange of investor assets blocked in the Russian Federation and abroad. Thereby, only foreign securities that have been accounted for in the accounts of the NSD may be tendered for repurchase.