CBR does not see demand for additional conversion of DRs - Chistyukhin

MOSCOW. Sept 4 (Interfax) - The Central Bank of Russia (CBR) does not currently see demand from market participants to carry out another conversion of depositary receipts (DR), the first deputy governor of the CBR, Vladimir Chistyukhin said.

In an interview with Interfax in May, Chistyukhin said the CBR and the Finance Ministry were discussing the possibility of another conversion of Russian issuers' securities and other measures to localize securities in Russian infrastructure.

"At that time we discussed this matter in the context that, perhaps, there will be demand from market participants to continue conversion and to provide some additional time to do this. We're talking with market participants, they're saying that the situation is stable at the moment. We don't have demand," Chistyukhin told reporters on the sidelines of a conference to mark the ten-year anniversary of the "megaregulator."

"This means that those who wanted to meet their needs for localizing securities all did so," he said.

The conversion of DRs into Russian issuers' local shares was carried out in 2022 in two stages: automatic, without investors' participation, and mandatory, at the request of investors. Under a law passed in July 2022 (No. 319-FZ), depositories had the right to refuse mandatory exchanges of securities in two cases: if there was reasonable doubt as to the completeness and veracity of information provided in the request or if they received a request for a larger number of securities than was recorded in the account.

The CBR said in the spring of 2023 that depositories had refused to carry out mandatory conversion of DRs on about 20% of requests they received.