16 May 2023 15:30

Central Bank of Russia looks to make transactions with exiting non-residents conditional on some shares being placed on exchange

MOSCOW. May 16 (Interfax) - The Central Bank of Russia deems it necessary to introduce an obligation to place some shares in companies bought from non-residents exiting Russia on the stock exchange.

"We are seeing, in keeping with permits by the government commission, transactions for the purchase of shares and stakes and so on from foreign owners of companies. And we believe that for such purchases there should be an obligation to put at least some of the shares on the market. This will also provide diversify the toolbox for investors somewhat," Central Bank Governor Elvira Nabiullina said at conference titled "Russian Stock Market 2023", organized by NAUFOR, the National Association of Securities Market Participants.

This issue is now being discussed with the government, she said.

"Yes, there is such an idea, it's good that it's living and breathing," said Oleg Vyugin, chairman of the supervisory board of the Moscow Exchange .

The sub-commission of the government's foreign investment commission when issuing permits for certain "exit" transactions "is already making a number of requirements, including conditions precedent, for example, safeguarding the work force, the level of investment, production, and so on, setting specific KPIs and monitoring periods.

The Central Bank will lobby hard for this initiative and hopes that the other participants in the discussion will agree with it, Vladimir Chistyukhin, the Central Bank's first deputy governor, told reporters later.

"This kind of proposal cannot be retroactive [will not apply to approved transactions]. The discussion of this topic is underway. Let's hope we'll have a decision in the near future," he said.

Asked what size of stake new owners might have to place, Chistyukhin named 10-20% of shares acquired from foreigners as a guideline.