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Bank of Russia to postpone ban on purchase of foreign securities by unqualified investors

The document has been released on the portal of draft regulatory legal acts and says that the instruction "is subject to official publication and is to come into force starting March 30, 2023"

MOSCOW, December 9. /TASS/. Russia’s Central Bank plans to postpone a ban which prevents unqualified investors from buying securities issued by hostile countries until March 30, 2023, according to a draft instruction by the regulator ‘On securities and derivative financial instruments meant for qualified investors’.

The document has been released on the portal of draft regulatory legal acts. It says that the instruction "is subject to official publication and is to come into force starting March 30, 2023."

Earlier, it was expected that brokers would suspend the execution of any instruction by an unqualified investor on increasing the position on securities of foreign issuers from hostile countries starting January 1, 2023. Such an order was submitted to brokers in early September 2022. That said, according to the document, starting October 1, 2022 market participants were to stop executing orders by non-qualified investors if as a result of the transaction the share of such securities in the portfolio would exceed 15%, starting November 1 - 10% of the client’s portfolio, and starting December 1 - to 5%.

The order also concerns requests on the purchase and sale of physically-settled derivatives, whose basic assets are the foreign securities of issuers from hostile countries, as well as requests on transactions to increase short positions on such securities.

Meanwhile, the restrictions do not cover transactions to close short positions, as well as to transactions with foreign securities of Russian companies and issuers from friendly states.