Unfreezing by the power of the word – Newspaper Kommersant No. 193 (7394) of 10/18/2022

After clarifications from the EU Commission, Russian brokers began preparing appeals to European regulators regarding the unfreezing of client assets. Lawyers warn that professional participants have only a month left. At the same time, experts are not too optimistic, believing that decisions on unlocking will not be made in the near future.

According to the Kommersant poll, after the European Commission clarified the issues of unfreezing the blocked assets of Russian investors, professional participants in the securities market stepped up their actions in this direction.

Otkritie Investments plans to send an application to the Belgian regulator (the country’s Ministry of Finance) in early November for permission to unblock all assets of non-sanctioned clients in full. “Most of the ISINs (security codes.— “b”) is American, but there are also significant volumes in the securities of issuers in Germany, Great Britain, Canada and other countries,” Andrey Salashchenko, Deputy General Director of Otkritie Investments, explained.

Tinkoff Investments at the same time wants to request a license from the Belgian Ministry of Finance, which will allow the transfer of assets from the National Settlement Depository (NSD) to other depositories. Freedom Finance will ask to exchange frozen assets – US stocks and Eurobonds. But, according to the company’s operating director Galina Karyakina, “there is no understanding yet” how and to what extent.

According to Kommersant’s sources, two more large brokerage companies are considering the option of filing an appeal. In Finam, the issue is “under discussion, various options are being considered.” Oleg Chikhladze, director of the brokerage business at BCS World of Investments, said that the company is taking part in the working group of the Moscow Exchange Club for the protection of investors’ rights. Club members agreed to prepare requests for individual licenses to unlock assets if NSD does not receive a response from European regulators by November 1.

Foreign counterparties must complete all transactions with the Russian depository by January 7, 2023. And taking into account the terms of consideration, applications for licenses should be submitted approximately before mid-November, says Ekaterina Makeeva, head of the sanctions practice at AB A-PRO. Investors themselves, according to Igor Kuznets, a partner in the ITS WM multi-family office, have very few options left – in particular, to try to individually obtain permission (license) to unlock assets. “At the same time, it is necessary to prove that an unauthorized client is behind the blocked NSD sanctions, and to confirm the chain of ownership of the blocked securities portfolio,” the lawyer added.

According to the Central Bank, as a result of blocking the “depository bridge”, the assets of more than 5 million individuals were frozen for a total amount of more than 320 billion rubles. However, according to Ms. Makeeva, judging by the wording, this amount does not take into account securities purchased on behalf of brokers, as well as securities of legal entities. At the same time, Mr. Kuznets notes, since October 6, no specific decisions have been made by the regulators of Belgium or Luxembourg. Moreover, the expert clarifies, given the start of work in the EU on the next package of sanctions and the complicated foreign policy situation, it is likely that decisions on unfreezing will not be made yet.

Ksenia Kulikova