Work continuing on mechanism for exchange of investors' frozen assets - first deputy CBR head

MOSCOW. Oct 9 (Interfax) - The Bank of Russia together with the government continue to work on a mechanism to exchange the blocked assets of Russian and foreign investors, the first deputy chairman of the Central Bank of Russia (CBR) Vladimir Chistyukhin said.

"This work continues, I hope we will get some results. Although in any case, the mechanisms we talked about will require not only a positive decision from the Russian side, but also a corresponding decision from Western regulators, who will then have to agree with their residents, who have funds frozen here in type-C accounts," Chistyukhin said at a meeting of the State Duma Committee on Financial Markets.

Finance Minister Anton Siluanov said in August that the government and the Bank of Russia had prepared a draft presidential decree on the beginning of the exchange of blocked assets of Russian and foreign investors. At the first stage, there are plans to unblock accounts with funds totaling about 100 billion rubles. There are currently 3.5 million Russian citizens who have assets worth 1.5 trillion rubles blocked. The Central Bank explained that the draft decree provides for the possibility of acquiring blocked securities from Russian investors with money from Type C accounts. Participation of Russian and foreign investors in this process will be voluntary.

The Finance Ministry expects that the mechanism for exchange of blocked assets may become operational in 2023, Ivan Chebeskov, head of the ministry's Financial Policy Department, said in September.

First of all, the Finance Ministry and the Central Bank would like to cover investors with portfolios up to 100,000 thousand rubles, Chistyukhin said earlier. Central Bank deputy chairman Alexei Guznov told Interfax in September that the mechanism of exchange of blocked assets is being prepared without haste, with the details of this non-standard legal structure requiring detailed discussion in order to avoid mistakes.

As of early November 2022, the Bank of Russia estimated that the total amount of funds in special type C ruble accounts, which, among other things, block income on securities owned by nonresidents from "unfriendly" countries, exceeded 280 billion rubles. This was the only time the Central Bank disclosed this figure. According to Interfax sources, the amount of funds on type C accounts at the end of 2022 was nearing 0.6 trillion rubles. The Central Bank disclosed a similar figure in its analytical review of the banking sector for Q1 2023: it said that funds accumulated in type C accounts amounting to 0.7 trillion rubles were transferred from NSD to the Deposit Insurance Agency. According to a CBR board decision dated December 29, 2022, lenders had to open type C accounts with the DIA no later than January 20.