St. Petersburg Exchange draws diagrams – Kommersant FM
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The St. Petersburg Exchange will be able to return only a third of customer funds for now. The site estimated the volume of currency that was not subject to American restrictions at almost 6 billion rubles. This amount includes funds in American and Hong Kong dollars, as well as tenge and yuan. The money will be distributed proportionally among bidders who had foreign currency in their accounts. Clients will be able to withdraw this money only in rubles. Brokers will set the exact payment terms.
The remaining part of the currency and securities will be transferred to non-trading sections due to the fact that foreign counterparties do not carry out transactions on behalf of the sanctioned St. Petersburg Exchange. And how to return them is still unknown, says Dmitry Alexandrov, managing director of the investment company Ivolga Capital:
“The latest message from the St. Petersburg Exchange talks only about cash. In addition to securities, cash was also stored on the site within the clearing center. Some of them were also subject to restrictions, since this currency could be located, for example, in foreign banks that are not ready to make payments due to the sanctions regime. But, as the St. Petersburg Exchange reported, about 30% of the cash balances are in an unblocked state, and, in fact, we are talking about the transfer of exactly this money.
The remaining 70% of funds, assets, including securities, are valued at a significantly larger amount. It is the money in clearing that is stored in a small volume, since professional participants could withdraw it from there to carry out repo transactions with the Central Committee on the Moscow Exchange. And, of course, most of the cash equivalent is stored in securities, which now remain blocked.”
As the St. Petersburg Exchange clarified, by December 4, the site’s international consultants must provide several scenarios in which they can try to unblock assets. However, there are not very many options, says Andrey Ryabinin, head of the sanctions practice of the DelcrEdere Bar Association:
“Apparently, the scheme will be even more complicated than for other players, since American sanctions are what matter here. The St. Petersburg Exchange requires up-to-date information on the status of negotiations with foreign infrastructure regarding the execution of the OFAC general license. It was released simultaneously with the site being added to the US sanctions list. While this information is not available, it is premature to take any individual actions.
Where these assets can be transferred is an open question. Most likely, OFAC’s main requirement is a transfer to non-sanctioned infrastructure. Accordingly, such transfer is not possible to any accounts. Here, of course, it is necessary for investors to interact with the St. Petersburg Exchange and its depositories in terms of providing details that would meet the requirements of the general license.
We have the example of Luxembourg and Clearstream, when the regulator issued a general license, but due to a number of factors it turned out to be unenforceable. In the case of OFAC, there are still not many such cases. Basically, those general licenses that are issued make it possible to terminate relations with a sanctioned person. But this is the first time that the Russian exchange is subject to American sanctions.”
Last week, the St. Petersburg Exchange carried out settlements on transactions with “stuck” foreign securities. We are talking about operations that were carried out from November 1 to November 2, the day when the site fell under American sanctions. But for now, these funds cannot be physically withdrawn.
Everything is clear with us – Telegram channel “Kommersant FM”.
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