21 Jun 2022 19:10

OFAC extends license to Sberbank's depositary to wind up receipts program until Oct 17

MOSCOW. June 21 (Interfax) - The United States Treasury's Office of Foreign Assets Control (OFAC), responsible for sanctions enforcement, has extended until October 17 the special license granted to JPMorgan Chase, Sberbank's depositary, to wind up the bank's depositary receipts program, originally valid until June 17, JPMorgan said in a statement.

The depositary receipts program wound up on June 16.

The London Stock Exchange removed Sberbank's American Depositary Receipts from the list of securities admitted to trading on June 20. Deutsche Borse, operator of the Frankfurt Stock Exchange, delisted Sberbank's depositary receipts on March 17.

The depositary bank's books for the Sber depositary receipts program are open for conversion of depositary receipts into shares. Under the terms of the depositary agreement and the individual license of the depositary bank, the conversion of depository receipts into ordinary shares must be completed before October 17, 2022," Sberbank said. One receipt is convertible into four ordinary shares.

Holders of depositary receipts kept in the Russian National Settlement Depository (NSD) must submit an instruction for conversion to their broker indicating the depo account at the Russian depositary bank, to which ordinary shares will be credited.

The European depositary and clearing systems Euroclear and Clearstream have restricted the fulfillment of orders for the conversion of depositary receipts on the NSD account until clarification related to the imposed sanctions is received, Sberbank said.

The conversion process is the same as above for holders of depositary receipts held by Euroclear/Clearstream or DTC (U.S. Central Securities Depository), and is not subject to no restrictions by Euroclear/Clearstream.

Shares will be credited to the type "C" depo account indicated in the application within the framework of the conversion of depositary receipts owned by non-residents.

"In light of restrictions imposed by foreign regulators and issued licenses, non-residents of foreign countries may have their rights to own shares of Sberbank restricted after the deadlines set by regulators. In this regard, investors should independently analyze the restrictions of their regulators regarding Sberbank securities," Sberbank said.

JPMorgan Chase has been the depositary bank for Sberbank receipts since 2017. It notified Sberbank that it was withdrawing its status as the depositary of Sberbank securities on March 15, 2022.

The register of Sberbank's receipt holders closed on April 27, 2022, the effective date of the federal law on delisting the receipts of Russian companies from foreign exchanges.

Sberbank said at the end of April that it would not be filing an application with the Russian government to keep its depositary receipt program, as the restrictions imposed by foreign regulators make it impossible to retain the program.

The U.S. imposed blocking sanctions on Sberbank on April 6 stipulating a freeze on assets in the U.S., as well as a ban on U.S. citizens carrying out any transactions with the bank. Some other countries have also imposed similar restrictions on Sberbank.

Sberbank previously had two receipt programs, both global and American, but converted global depositary receipts to ADRs in December 2012.