RBC: Central Bank revealed cases of illegal write-off of securities from Russian depositories abroad

The Bank of Russia discovered cases of write-offs of foreign securities from the accounts of Russian depositories in foreign structures. This follows from the letter of the regulator, which I read RBC. Its authenticity was confirmed by three market participants.

Lawyer Elena Ryazanova also drew attention to the document. Despite the fact that the regulator’s letter does not indicate that we are talking about the relationship of the National Settlement Depository (NSD) with the European Euroclear and Clearstream, according to the expert, we can talk about the beginning of unblocking securities for individual non-residents.

NSD is a Russian non-banking credit organization, the central depository of Russia, a professional participant in the securities market, carrying out depositary activities. It is part of the Moscow Exchange group.

Earlier, the European Commission named the conditions under which the assets of Russians can be unlocked. One of them is obtaining permission from European regulators.

In response to the unlawful write-off of securities, the Central Bank until December 31, 2023 “will refrain from applying enforcement measures against depositories that have depository accounts opened in a foreign organization,” follows from the document. At the same time, the Bank of Russia does not specify which papers are being written off. The Central Bank attributed the illegal write-off to “unfriendly actions … including those related to the introduction of restrictive measures against the Russian Federation, Russian legal entities and citizens.”

Earlier, foreign depositories Euroclear and Clearstream blocked the account of the Russian NSD due to the introduction of EU sanctions against it.

In November, the Bank of Russia extended the period of restriction on exchange trading in foreign securities blocked by international depositories until April 1, 2023. From November 7, part of the foreign securities exchange blocked on non-trading accounts of the settlement depository of the St. Petersburg Exchange became available for brokers and their clients. At the end of December, Euroclear unofficially informed NSD that the Belgian Treasury will provide permission for operations to unlock clients’ assets.

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Maria Fedotova