![]() Second, some of the Russian issuers were sanctioned by several countries, which made it impossible for many brokers, depositary banks, and other institutions to deal with DRs related to such Russian issuers’ shares without a license from a sanctions authority, if at all. This also resulted in DR holders with DRs accounted in the Russian custody system to not be able to proceed with the DR cancellation. Further, in June 2022, the European Union imposed blocking sanctions on NSD, making it impossible to do the conversion by those investors whose DRs are held through Euroclear, Clearstream, and other EU institutions. Make a request through the Russian custodian to receive the underlying Russian shares.ĭR holders have been experiencing several practical difficulties in converting the DRs under the procedure set out by the Delisting Law.įirst, the European clearing systems blocked the accounts of Russia’s National Settlement Depository (NSD).Give a cancellation notice to the DR program depository bank to cancel the DRs.Open a depo (custody) share account with a Russian custodian directly or via a so-called foreign nominee (omnibus) account of its non-Russian broker or custodian with a Russian custodian.Under the Delisting Law and other Russian legislation, a DR holder must do the following to have its DRs converted into the underlying Russian shares: As result, many DR programs are now being terminated and the DRs need to be converted into the underlying Russian shares. Many Russian issuers decided to have their DR programs terminated, and in several instances those Russian issuers that intended to keep their DR programs were not granted the requisite exemption. 114-FZ of Ap(the Delisting Law), which in effect required Russian issuers to terminate the DR programs on their shares (the underlying Russian shares), unless exempt by the Russian government commission on control over foreign investments. Once published, the Draft Law, in its relevant part, will become effective immediately upon publication (the Effective Date). ![]() It is expected that this will be completed very shortly. The Draft Law needs to be approved by the Federation Council, Russia’s parliament upper chamber, and then will be signed into law by the president and published. ![]() 116264-8 (the Draft Law) to be in response to international sanctions that have made it impossible to proceed with the conversion as contemplated by the DR programs in many instances. 116264-8 on June 29, 2022, containing rules allowing the conversion of depository receipts into the underlying Russian shares without a need to go through non-Russian depositary banks, custodians, brokers, and other similar institutions. The State Duma, Russia’s parliament lower chamber, adopted draft law No. ![]()
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