The Central Bank has simplified the conversion of receipts into shares for companies moving to the Russian Federation

Bank of Russia reportedthat depositary receipts of companies moving to the Russian Federation will be automatically converted into shares. This procedure will only affect securities whose rights are recorded by Russian depositories, and the conversion itself will take no more than three weeks, the Central Bank noted.

“After state registration, an international company is obliged to notify the holders of the securities register and depositories about the start of deconversion within five working days. Then the accounting institutions will write off the receipts from investors’ accounts and credit them with shares of the international company,” the Central Bank said in a statement.

In April 2022, a law came into force that prohibits the circulation of depositary receipts for shares abroad. So the authorities tried to limit the turnover of shares of Russian companies in other countries due to their rapid decline in price.

Today VK completed the process of changing the bank and moving under Russian jurisdiction. On September 12, the company ceased trading on the London Stock Exchange. On the Moscow Exchange, trading in VK depositary receipts will be suspended from September 21, after which they will resume in the status of shares. According to Reuters, potential candidates for redomiciliation include: Fix Price, Rusagro, Etalon, TCS Group.

Petr Buzlaev