MOSCOW, August 8. /TASS/. Russia’s Central Bank has limited certain speculative transactions on the stock market to maintain financial stability.
In particular, depositories and registrars will not be able to transact in securities transferred from foreign depository or custodian accounts within six months other than those purchased prior to March 1, 2022, the regulator reported on Monday. Such six-month lock-up period is also applicable to securities bought by non-residents from friendly countries and controlled foreign companies (save for residents of the Republic of Belarus) from other non-residents in the period from June 25, 2022 to the date when a C-type depo account was reclassified into an ordinary depo account. In addition, depositories are ordered to ensure the segregation of such assets.
The restrictions are inapplicable to shares obtained by an investor as a result of the cancellation of depositary receipts provided the investor was holding them before March 1, 2022, the Central Bank noted. The novel restrictions will not apply to shares arising from the execution of a securities loan agreement or the second leg of a repo if the first leg provides for a transfer of depositary receipts proving the title to such shares. Other exemptions are transactions authorized by the Government Commission on Monitoring Foreign Investment in the Russian Federation.
The Bank of Russia has recently revealed that some brokers are offering to their clients to buy securities from non-residents in foreign jurisdictions promising to transfer such assets to Russian depositories. "The regulator draws investors’ attention to the risks they will be exposed to if they get involved in the transactions offered by brokers. Investors will be unable to dispose of the purchased securities at their own discretion. Moreover, there is no guarantee that they will have the financial result they expect," the report said. When advertising such services, brokers should disclose to their clients all risks arising from the purchase of securities abroad from non-residents representing hostile countries, the regulator added.