Russian Central Bank hopes that mechanism for exchanging frozen assets will function; this depends not only on Russia - First Deputy Governor Chistyukhin
MOSCOW. Nov 9 (Interfax) - The Central Bank of Russia (CBR) hopes that the mechanism for exchanging the frozen assets of investors - as implemented under the presidential decree issued on Wednesday - will function in practice, though this depends not only on Russia, as the consent of foreign regulators is required as well, Central Bank First Deputy Governor Vladimir Chistyukhin said at a joint meeting of the State Duma committees on financial policy, budget and taxes, and economic policy.
Central Bank Governor Elvira Nabiullina recalled that the decree limits the total initial value of securities owned by one resident that could be alienated as part of the created mechanism at 100,000 rubles. Nabiullina believes that this criterion applies to more than 80% of the investors whose assets have been blocked owing to the sanctions.
The day prior, a presidential decree "On Additional Temporary Measures of an Economic Nature Related to the Circulation of Foreign Securities" was published, creating legislative opportunities for the "exchange" of investors' assets blocked in Russia and abroad.
The CBR board will have to establish the procedure and terms of interaction of professional market participants with investors and the organizer of the asset exchange process, as well as the specifics of identification of non-residents for participation in it.
As noted in a commentary accompanying the published document, distributed on Thursday by the Finance Ministry's press service, the state will not participate in the organization of the exchange itself. The mechanism will be completely voluntary for all market participants, with brokers and other securities market participants taking part in it.
Non-residents will be able to redeem blocked foreign securities using funds on their type-C accounts. Transactions will be concluded "by means of trades". The terms of their conduct should be established by the Government Commission on Monitoring Foreign Investment.
Foreign securities purchased by non-residents will be credited to special transit depo accounts opened by Russian depositories in their name. These securities will then be written off on the basis of non-residents' orders to accounts opened with foreign organizations.
The aggregate initial value of securities owned by one resident, which can be transferred within the framework of this mechanism is limited to 100,000 rubles.
Finance Minister Anton Siluanov reported in August that the Finance Ministry and the Central Bank were working on a presidential decree. According to his estimates, assets of 3.5 million Russian citizens, worth 1.5 trillion rubles, were blocked at that time.