30 May 2022 14:36

SPB Exchange: share of stand-alone securities in monetary terms does not exceed 14% of client portfolio accessible for trading for all participants

MOSCOW. May 30 (Interfax) - The Central Bank of Russia (CBR) has sent instructions to participants of trading on the SPB Exchange and their custodians to identify and separate foreign securities, which are accounted for and kept on accounts of SPB Exchange settlement depository Best Efforts Bank at the National Settlement Depository (NSD), the exchange said in a statement.

The regulator's measures are aimed at protecting the rights and interests of investors in a situation of uncertainty, while it is impossible to make settlements with stand-alone foreign securities due to restrictions imposed by Euroclear.

According to the instructions, the number and names of securities to be separated will be determined based on the results of trading on May 27, including securities, settlements for which will end on May 31 and June 1.

When distributing stand-alone securities among clients, trading participants will be guided by a procedure similar to the one used by depositories for crediting securities upon the occurrence of corporate events.

The general algorithm for separation of foreign securities will be as follows. For each foreign security, a determination will be made with respect to the ratio of shares between securities available for trading and those separated and accounted for via the NSD.

Based on the resulting proportion, the number of securities to be transferred to the non-trading section of the depo sub-account shall be determined with respect to the account of each client holding such securities.

This procedure will affect only those clients whose portfolios contain securities subject to separation. It is also important to note that only part of such securities in the client's portfolio will be separated, with their exact number to be determined based on the principle of proportionality.

Separation will apply to securities with a primary listing on U.S. stock exchanges, except for HeadHunter Group PLC, Yandex N.V ., Ozon Holdings PLC, Cian PLC. Separation will also not affect securities listed on other exchanges, in particular, securities of TCS Group Holding PLC and Fix Price Group Ltd.

All investors whose securities are subject to separation will remain the legal owners of all securities acquired by them, including all securities transferred to the non-traded segment.

Ownership rights to investors' securities are confirmed by notices from the depositories where the depo accounts of each investor are opened. At the moment of opening of trades on May 31, operations with securities subject to separation will not be conducted.

As a result of these instructions, freely traded foreign securities will be fully separated from securities trading in which is not possible prior to a change in the policy of Euroclear with respect to Russian depositories.

The actions taken will not affect the volume of titles of securities available for trading on SPCEX.

More than 1,650 titles of securities of international companies are available to investors for xchange deals. For some titles of securities, the units available for sale will declined. In monetary terms, the share of stand-alone securities will be less than 14% of the total client portfolio available for trading of all trading participants, which currently provide access to trading on the SPB Exchange.

The Bank of Russia, the SPB Exchange and trading participants are working continuously to develop a systemic solution, in touch with international counterparties.