Private clients apply for the exchange of foreign assets

Brokers began accepting applications from clients to exchange frozen foreign assets. One of the obstacles was the incomplete disclosure of data on securities quotations as of the reporting date, which were prepared by the Investment Chamber. But already on the second day of collection, the number of submitted orders from some brokers reached tens of thousands. At the same time, market participants emphasize that the exchange procedure carries certain risks, and primarily sanctions, both for the organizer of the auction and for non-residents participating in the purchase.

As brokerage companies told Kommersant, the investment company Investment Chamber (the organizer of trading for the sale of blocked assets, see below) “Kommersant” from March 12) on the night of March 26 provided the missing quotes for foreign securities. As a result, professional participants were able to begin fully collecting exchange applications from their clients.

Formally, the collection of applications started on March 25. However, as market participants said, the Investment Chamber did not provide closing prices for trading on March 22 for more than 100 securities (in total, 3,834 securities can be offered for sale). However, even now, says Igor Pimonov, head of the department of the Internet broker BCS World of Investments, the organizer shows a zero price for about 20 securities.

Decree of the President of the Russian Federation on the purchase by non-residents of foreign securities from resident individuals for rubles, including from type “C” accounts, signed on November 8, 2023.

According to the document, residents can present for redemption securities worth no more than 100 thousand rubles.

The redemption process will take place in four stages: collection of applications from resident sellers from March 25 to May 8, formation of lots from May 13 to 31, collection of applications from potential non-resident buyers from June 3 to July 5, determination of the sale price and acceptance of applications until 29 July.

Due to problems with quotes, the start of accepting applications was delayed by a day, in particular, Go Invest, Alfa Investments, and Digital Broker. Tinkoff Investments began accepting applications on March 25 for some clients, and on March 26 it extended to all clients. Finam and BCS accepted applications from March 25 only for those instruments for which prices were provided by the Investment Chamber.

Investors are applying quite actively, brokers say. By mid-day on March 26, Finam received more than 2 thousand applications, BCS received more than 16 thousand applications. Another large brokerage company received “several tens of thousands of orders.” “Clients are showing high interest, but since the order cannot be withdrawn after being sent to the trading organizer, it is better not to rush, evaluate your assets and make a choice once,” emphasized the investment company Digital Broker.

A Kommersant source in a large brokerage company believes that professional participants should not have any technical difficulties at the stage of collecting applications. However, market participants warn that the exchange process in general contains many risks.

In particular, according to Dmitry Lesnov, head of the client service development department of Finam Financial Group, the organizer of the auction may fall under sanctions, as a result of which “non-residents will not be able to take part in the exchange.”

BGP Litigation partner Sergey Glandin noted that issues such as the ability for buyers to check the sanction status of sellers remained unresolved, since the restrictive measures of most unfriendly jurisdictions prohibit transactions from which a person under sanctions could benefit.

Mr. Glandin explains that foreign regulators “have taken a wait-and-see approach and remain quiet in the information field,” so their willingness to issue permits for assets acquired in this way is not entirely clear.

Mr. Lesnov clarifies that “so far there is no information in open sources that any of the large non-residents are ready to participate in the exchange.” He believes that market participants “specifically do not advertise these intentions so as not to attract unnecessary attention.”

At the first stage, it is planned to exchange approximately 100 billion rubles, so experts believe that non-resident funds should be enough. However, “if we generally evaluate the blocked assets of Russian and foreign investors, then the situation is not in our favor,” notes Mr. Lesnov. Therefore, he believes, “there may not be enough investors’ assets for other stages of the exchange.”

Ksenia Kulikova