authorities oblige sellers of localized OFZs to pay a fee of 20% on each transaction – Kommersant
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A subcommittee of the government commission for the control of foreign investment has obliged holders of securities localized in Russia to pay a fee to the federal budget on each sale; the amount of the fee will be 20% of the nominal value of Russian securities. This is reported Frank Media referring to an unnamed investment banker and federal official.
Localized securities are shares, bonds of Russian companies, as well as OFZs and shares that, before the start of the Russian military operation in Ukraine, belonged to foreign entities, and in 2022 were transferred to Russian residents in a “special procedure”.
“Initially, the desire of the Ministry of Finance and the Central Bank was to help those who were stuck in foreign depositories, but a combination of different laws made it possible to arbitrate transactions where third parties from unfriendly non-residents acted as the selling party, those who wanted to make money on arbitrage took advantage of this and discount. The logic is that we do not want to destabilize the market, and if the state has created arbitration, then it should participate in the distribution of profits when it is closed, ”the official told the publication, explaining the decision of the authorities. He clarified that each transaction for the sale of localized securities will continue to be approved by the subcommittee.
In March 2022, the government approved the rules for transactions between Russian companies and citizens and companies from unfriendly countries. All of them must be agreed upon by the relevant government commission, where the participants in each transaction must submit all data on its goals, subject and essential conditions.
In July 2022, the government adopted Law No. 319-FZ, which allowed investors to forcibly transfer accounting for domestic issuers’ securities from foreign holders’ depo accounts to the Russian infrastructure if a foreign depository prevents transactions with such securities.
In August 2022, the Central Bank banned depositories and registrars of transactions with securities from forcibly localizing them if they were purchased after March 1, 2022. On March 23 this year, the state is even stronger tightened rules regarding transactions with localized securities – now even the subsequent sale or transfer of such securities will require permission from the government commission.
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