Attempts to circumvent C-type account restrictions taking place - Central Bank first dep head
MOSCOW. Nov 14 (Interfax) - The Central Bank of Russia is seeing attempts by market participants to create schemes to circumvent restrictions for C-type accounts, on which funds of non-residents from "unfriendly" jurisdictions are frozen.
"Such attempts are taking place. The restrictions that are imposed on C-type accounts are giving rise to the practice, both with the participation of unfriendly counterparties, and with the participation of friendly counterparties as well as Russian participants, when they try to capitalize on creating schemes to transform funds currently restricted in use, converting them into funds that are not restricted in use," Central Bank First Deputy Governor Vladimir Chistyukhin told reporters on the sidelines of the Finopolis forum.
Central Bank Governor Elvira Nabiullina said in the middle of September that hundreds of billions of rubles had accumulated in C-type accounts.
The total amount of funds in C-type accounts currently exceeds 280 billion rubles, the Central Bank of Russia told Interfax on November 11.
Non-residents from "friendly" jurisdictions gained access to the Russian stock market in September, but the volume of transactions with their participation was low in the first weeks. The Central Bank has said that such non-residents sold shares for only 700 million rubles in September.
The caution being exercised by investors is logical: they are limiting their risk appetite in times of high uncertainty, Chistyukhin said.
"After the situation has stabilized somewhat and after investors, both Russian and foreign, have got a better idea of the Russian financial market's development path, we very much hope that their participation will be more wide ranging," he said.
Unfreezing assets
Asked about negotiations with the EU countries on issuing licenses to unblock some assets that have been frozen, Chistyukhin said that "there is no additional information," including about possible negative decisions by the regulators.
Irina Grekova, Managing Director for Compliance and Business Ethics at the Moscow Exchange , spoke about what has been done in this area in an interview with Interfax.
She said participants are now preparing to submit requests to European regulators to unfreeze the assets of non-sanctioned clients.
The Moscow Exchange Group's National Settlement Depositary has "enquired about receiving a license, but has not received an answer," Grekova said.
She also talked about issues relating to the payment of taxes that have arisen while documents were being drafted to obtaining a license, because National Settlement Depositary acts as tax agent. Obligations must be fulfilled directly in the U.S. tax authority's favor," she said.
"We agreed with all members of the Investor Protection Club to indicate both gross and net - both with taxes and without taxes - in the requests," she said.