Sberbank proposes letting foreigners invest in IPOs from C accounts while keeping them fenced off

MOSCOW. May 19 (Interfax) - Sberbank has proposed to consider allowing foreigners to invest in Russian initial public offerings with money held in their C-type accounts, with purchased shares and dividends subsequently credited to these same accounts.

"In 2022, 2023, 2024, Russian companies paid 1.4 trillion rubles into C-type accounts. By our estimates, by the estimates of Sberbank analysts, 704 billion rubles will be allocated to C-type accounts in 2025 by the largest Russian companies paying out dividends," the leading Russian lender's managing director and head of capital markets, Eduard Jabarov said at the Russian Stock Market 2025 conference held by stock market participants association NAUFOR.

This money is essentially "completely shut out of the stock market," and in "our view, one could consider the possibility of allowing foreigners to invest these funds in the IPOs of Russian companies," Jabarov said. Such investment should be permitted on the condition that the purchased shares and future dividends on them must be credited to the same C-type accounts, he added.

"This, in principle, does not reduce, but increases the amount of money in C-type accounts. In other words, there is no unilateral clear-out of funds from C accounts, but at least this money capitalizes the Russian stock market and real sector of the economy," Jabarov said.

Official sources have not published information about the amount of money in C-type ruble accounts, which among other things hold blocked income on securities owned by "unfriendly" foreign investors, for a long time. At the beginning of November 2022, the Central Bank estimated the amount at more than 280 billion rubles. This was the only time the Central Bank disclosed this information and it has not commented on it since. Interfax sources said the amount held in these accounts neared 600 billion rubles at the end of 2022.

Keeping the blocked funds fenced off is fundamental for the Russian authorities. Deputy Finance Minister Ivan Chebeskov, commenting on a proposal to liberalize the current regime for nonresidents, said in March that any steps to unfreeze foreign investors' assets in C-type accounts are possible only in response to similar measures regarding Russian assets frozen abroad.

"You know that we still have a large amount of gold and forex reserves and our private assets blocked by Western countries, Western depositories. The mechanism for C accounts was developed as a countermeasure to what was done by the other side. While we have no understanding that any money will be unblocked, it probably wouldn't be very sensible on our part to unblock securities and funds that are now in C accounts," Chebeskov said.