7 Dec 2023 16:56

Russia's NSD waives fees for transfer of foreign securities for exchange of blocked assets

MOSCOW. Dec 7 (Interfax) - The National Settlement Depository (NSD) has canceled fees indefinitely for the transfer of securities of foreign issuers if a number of conditions are met. This is necessary to make it technically possible to exchange blocked assets, as NSD is under EU sanctions and EU residents are prohibited from participating in transactions that bring material benefits to the Russian central securities depository.

NSD said in a statement that the marketing period during which no fees will be charged for transferring securities of foreign issuers is being introduced starting on December 1 and until the completion of the procedures stipulated by the presidential decree on the exchange of investors' frozen assets.

The NSD will not charge fees if the following conditions are met: the transactions conducted must comply with the requirements of the law, including the regulations of the Central Bank; the securities of foreign issuers are transferred in correspondence with the special sections of NSD's securities accounts; the transfer of foreign securities is carried out under the counter orders of the sender depositor (or the depo account/section operator) and the recipient depositor (or the depo account/section operator) without cash settlement; securities are transferred within one depo account on behalf of a deponent and/or between depo accounts on behalf of the sending deponent without confirmation of the receiving deponent.

Russian President Vladimir Putin on November 8 signed Presidential Decree No. 844 "On Additional Temporary Measures of an Economic Nature Related to the Circulation of Foreign Securities" aimed at creating conditions for the exchange of investors' assets blocked in Russia and abroad. It stipulates that non-residents can buy back blocked foreign securities of Russian investors using funds on their type C accounts. Transactions will be concluded "by way of bidding." The conditions for such transactions will be set by the Government Commission for Monitoring Foreign Investment.

Foreign securities purchased by nonresidents 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 nonresidents' orders to accounts opened with foreign organizations. The Decree limits the aggregate initial value of securities owned by one resident, which may be alienated within the framework of the mechanism being created, to the amount of 100,000 rubles.

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.

Deputy Finance Minister Ivan Chebeskov said earlier in December that the draft decree on the order of asset exchange will be submitted to the government in the near future. First Deputy CBR Governor Vladimir Chistyukhin noted that the CBR does not expect an asset swap before the end of the year.