This is established in the decree of President Vladimir Putin. The document is published by Rossiyskaya Gazeta.
The securities to which the decree refers are shares, certificates of deposit thereof, OFZ, corporate bonds and shares of Russian investment funds. A special permit will also be required for transactions with securities of Russian issuers obtained as a result of the redemption of securities of foreign issuers certifying rights to such shares. The decree’s requirements also apply to subsequent transactions with assets acquired from hostile nonresidents.
Other operations subsequent to the purchase of securities may also be limited, for example, the donation
Banks and financial institutions without credit will have to obtain permission for such transactions from the Bank of Russia (the regulator may, among other things, limit the volume and number of subsequent transactions), and other applicants – from the Government Commission for the Control of Foreign Investments. It follows from the decree that such rules also apply to private investors.
At the same time, the requirements of the decree do not apply to transactions made during the conversion, redemption, redemption of Russian securities by their issuer; by repurchasing shares of PJSC and issuing securities convertible into such shares; associated with the redemption of investment shares by decision of the management company or in connection with the liquidation of the fund; in connection with the return of Russian securities in fulfillment of obligations under a securities lending agreement entered into prior to March 1, 2022 and obligations under the second part of a repo agreement entered into prior to March 1, 2022; as well as in connection with the transfer of Russian values received as a result of universal succession.
In August last year, the Bank of Russia announced that it had identified cases where brokers offer their clients to buy securities in foreign jurisdictions from non-residents with the promise of transferring such assets to Russian deposits. Investors will not be able to freely dispose of the acquired securities, nor do they have guarantees of obtaining the expected financial result, the Central Bank warned then. “When making such announcements, brokers must inform clients about all the risks of acquiring securities abroad from non-residents of hostile countries,” the Bank of Russia emphasized.
At the same time, the Central Bank introduced a semi-annual “quarantine” for operations with such assets. In February 2023, said “quarantine” was extended for another six months.