5 May 2022 14:53

UK revokes Moscow Exchange's recognized status

MOSCOW. May 5 (Interfax) - The UK on Thursday revoked the Moscow Exchange's status as a recognized stock exchange, thereby removing some tax relief for new investors, HM Treasury said in a press release.

HM Revenue and Customs said that one of the main reasons for revoking the Moscow Exchange's status was the imposition of restrictions on foreign investors, barring brokers from selling assets at the instruction of non-residents of Russia, which meant that the exchange was no longer operating in line with the normal commercial standards expected of a recognized exchange. Consequently, the exchange has had its recognized status revoked, given that it had not lifted said restrictions by May 5.

HM Revenue and Customs announced on April 19 its intentions to revoke the Moscow Exchange's status.

"This means investors will not be able to access certain UK tax benefits in the future when trading securities on MOEX, although existing investments will be protected," according to the statement.

Financial Secretary to the Treasury Lucy Frazer previously said that the step sent a clear message that, "there is no case for new investments in Russia," as part of a continuing policy to isolate Russia in connection with its special operation in Ukraine.

"The status of a recognized stock exchange allows UK residents to receive tax preferences on certain classes of assets. If this status is revoked, these tax preferences will no longer apply to new investments. The tax preferences will remain for investments already made on the Moscow Exchange," the exchange said in a press release on April 19.

"Recognized stock exchange status is a classification given by HM Revenue and Customs for tax purposes, on application, to qualifying stock exchanges. Securities traded on a recognized stock exchange are eligible for certain tax treatments and reliefs," according to the statement.