The Bank of Russia has established facts of manipulation during trading at the exchange in the markets for units of Closed-end Rental Unit Investment Fund Holy Land (ISIN: RU000A0JVUU7) and Closed-end Rental Unit Investment Fund Kottedzhio Park (ISIN: RU000A0JUUC7) managed by Asset Management Solutions LLC (hereinafter collectively, the Units and the Funds) during the period from October 2014 to July 2018 (hereinafter, the Period).

Trading in the market for the Units during the Period was mostly carried out by concluding transactions in collusion between two unrelated groups of entities and individuals.

The first group (Group 1) included entities and individuals related in various ways: LLC Canopus Finance (TIN 5406771420; previously — LLC Krasoil Finance), LLC Cataris Capital (TIN 7733224572), LLC Managing Partner Cross Finance Group (TIN 7718309373), LLC Investment Company Energyiya Sintez (TIN 7702626754) and its legal successor Investment Company Averazh Ltd (TIN 2635107776), HAYFOLD COMPANY LTD (HE 313274), Viktor Oparin, Yury Sokolov, Alexandr Shakirov, Vadim Shakirov, Nikita Bushuev, Eduard Golubovich, Andrey Grishin, Alexandr Margolis, Alexey Shchepelev and Alexey Yakovlev.

The investigation has established circumstances evidencing that the most probable intentiom of transactions in the Units conducted by the above entities and individuals during the Period was to simulate trading activity and maintain acceptable prices for and trading volumes of the Units. These transactions caused significant deviation of the price for the Units.

The second group (Group 2) included related persons Dmitry Malakeev, Arsen Movsesyan and Roman Volkov who conducted Unit transactions in collusion during the period from November 2015 to November 2016. These transactions caused significant deviation of the price for the Units.

The Bank of Russia has also established signs of distortion in the price stated by appraisers when compiling reports on the valuation of the real estate being part of the Funds’ asset portfolios. In particular, the Bank of Russia has established that the land plots for sale offers used as comparables in the valuation were posted in the internet using the IP address of a valuation company employing the appraiser who had prepared and signed the valuation report.

Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law), the actions of the entities and individuals from Group 1 and Group 2 are classified as manipulation in the market for the Units. The actions committed by LLC Cataris Capital, LLC Canopus Finance, IC Averazh Ltd, LLC Managing Partner Cross Finance Group, HAYFOLD COMPANY LTD, Nikita Bushuev, Eduard Golubovich, Andrey Grishin, Alexandr Margolis, Alexandr Shakirov, Alexey Shchepelev and Alexey Yakovlev with the purpose of deceit as to the price of the Units are also classified as manipulation in the market for the Units in accordance with Clause 6, Part 1, Article 5 of the Federal Law.

The above entities and individuals breached the ban imposed by Part 2, Article 6 of the Federal Law.

The Bank of Russia has sent orders to avoid similar violations in future to the individuals and operating legal entities who conducted the above transactions with the Units.

Facts of manipulation in markets of PJSC Mechel’s ordinary and preferred shares and market of PJSC Irkutskenergo’s ordinary shares

24^th of October

The Bank of Russia has established facts of manipulation in the markets of ordinary and preferred shares of PJSC Mechel and the market of ordinary shares of PJSC Irkutskenergo (hereinafter collectively, the Stock) at on-exchange trading in February — May 2017.

The investigation performed by the Bank of Russia has revealed that the clients of the same professional securities market participant (hereinafter, the Broker) Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina carried out transactions in collusion in the main Stock trading mode. Moreover, in a number of cases, Roman Sinitsin conducted similar Stock transactions using a brokerage account opened with another professional securities market participant.

The analysis of the said persons’ trading behaviour has shown that the Stock transactions between Roman Sinitsin and Andrey Sinitsin, as well as between Roman Sinitsin and Anna Sinitsina were made based on orders submitted with a minimum time difference and having identical price and volume parameters. In addition, these Stock transactions were carried out solely to achieve the trading goals of the above persons and their actions were not related to the Stock issuers.

In the absolute majority of cases, the said transactions caused substantial deviations in the Stock trading volume.

Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law), these actions taken by Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina are qualified as Stock market manipulation, which is a breach of the ban imposed subject to Part 2 of Article 6 of the Federal Law.

As of the moment of the above Stock transactions, Roman Sinitsin was controller of the market of the Broker’s securities, which enabled him to conceal these facts when preparing the reporting to be submitted to the Broker’s management bodies and the Bank of Russia.

The Bank of Russia has taken measures in relation to Roman Sinitsin, Andrey Sinitsin and Anna Sinitsina aimed at preventing similar actions in future.

The Bank of Russia has also made the decision to invalidate the qualification certificates of a financial market specialist issued to Roman Sinitsin.

Facts of misuse of insider information and manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established

27^th June

The Bank of Russia has established that Tatiana Grigorievna Anodina and Aleksandr Petrovich Pleshakov conducted transactions with ordinary shares of OJSC TRANSAERO AIirlines (hereinafter, the ‘Issuer’ and the ‘Shares’) illegally using insider information.

From September to December 2016, A.P. Pleshakov, being one the founders, a shareholder, a member of the board of directors, an insider of and a controlling person with respect to the Issuer, transferred 63,733,508 Shares (41.4% of total voting Shares) from his account to the account of T.G. Anodina based on several share donation agreements.

The information about the termination of grounds for control by A.P. Pleshakov with respect to the Issuer, about the decrease in his share in the total number of voting shares of the Issuer and the increase and subsequent decrease in the share of T.G. Anodina in the total number of voting Shares is insider information of the Issuer and was subject to disclosure.

It is highly likely that disclosure of information about the exit decision from the Issuer’s capital taken by A.P. Pleshakov would have caused sharp changes in the price of Shares.

This insider information was not disclosed, which allowed T.G. Anodina to sell Shares at anonymous exchange trading at current market prices from her own account to a wide range of investors as soon as Shares were credited to the account.

In view of the above, operations to sell the majority of the block of Shares from the account of T.G. Anodina were conducted illegally using insider information, which is a violation of the prohibition set out in Clause 1, Part 1, Article 6 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the ‘Federal Law’).

The Bank of Russia established that the total amount of losses that A.P. Pleshakov and T.G. Anodina had avoided using insider information to sell Shares exceeded 200 million rubles.

The sale of such a significant block of Shares amid a decrease in their trading volume and falling prices due to, among other things, the cancellation of the Issuer’s Air Operator’s Certificate, was also made possible thanks to statements made by the Issuer’s management in the media suggesting a possible resumption of the Issuer’s principal activity. These statements supported investors’ speculative sentiment, offset the price drop due to the sale of Shares from the account of T.G. Anodina, and supported the prices at the level that was comfortable for the misuse of insider information. The market responded to the above-mentioned publications with a surge in the price and trading volume of Shares resulting in substantial deviations of trading parameters.

After the disposal of the whole block of Shares from the account of T.G. Anodina, the Issuer no longer disseminated information about a programme for the Issuer to resume its principal activity. By the ruling of the Court of Arbitration of Saint Petersburg and the Leningrad Region, the Issuer was declared bankrupt in 2017.

Therefore, considering the activities of A.P. Pleshakov, being the major shareholder of the Issuer, it is highly likely that the information disseminated by the Issuer was misleading and the activities of the Issuer and its officials who disseminated the above-mentioned information qualify as manipulation in the market of Shares in accordance with Clause 1, Part 1, Article 5 of the Federal Law.

The materials have been submitted to law enforcement agencies.

Facts of manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established

27^th June

The Bank of Russia has established facts of manipulation in the market for ordinary shares of OJSC TRANSAERO Airlines (hereinafter, the ‘Shares’) in 2014–2015 at exchange trading.

The Bank of Russia paid attention to the deals conducted between customers of two professional securities market participants.

In the period under review, Jeimbo Cyprus Limited (registered in Cyprus) and Otkritie Advisory Services Limited (registered in the Islands of Bermuda) regularly conducted transactions with the Shares, which resulted in substantial deviations in their trade parameters, almost single-handedly forming the market of the Shares. In addition to exchange transactions, Jeimbo Cyprus Limited and Otkritie Advisory Services Limited entered into reverse OTC transactions.

Instructions to perform transactions on the part of Jeimbo Cyprus Limited were submitted by employees of OJSC TRANSAERO Airlines who were also employed by Jeimbo Cyprus Limited.

Taking into account the financial situation of OJSC TRANSAERO Airlines in the period under review, it was necessary for OJSC TRANSAERO Airlines to create an illusion of trading activity and maintain prices of Shares further used as collateral to borrow funds, which was also conducted through its subsidiary, Jeimbo Cyprus Limited.

Therefore, in accordance with Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the ‘Federal Law’), deals with Shares entered into by Otkritie Advisory Services Limited and Jeimbo Cyprus Limited qualify as market manipulation. The above-mentioned persons violated the prohibition set out by Part 2 of Article 6 of the Federal Law.

The circumstances, in which the deals with Shares were made, were established thanks to the cooperation between the Bank of Russia and financial market regulators from the UK (Financial Conduct Authority), the Republic of Cyprus (Cyprus Securities and Exchange Commission), and the Islands of Bermuda (Bermuda Monetary Authority) in line with the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO MMoU).

The Bank of Russia has taken measures to prevent market manipulation in further activities of Jeimbo Cyprus Limited. Otkritie Advisory Services Limited is no longer operating.

Facts of manipulation in the market for ordinary shares of PJSC Best Efforts Bank

13^th June

The Bank of Russia has established facts of manipulation in the market for ordinary shares of PJSC Best Efforts Bank (hereinafter, ‘Shares’) in organised trading from December 2016 to May 2018.

The operations consisting in manipulation of the market of the Shares were conducted by two independent groups of individuals.

The first group (Group 1) comprised Gennady Sergeevich Stefanov, Boris Vladimirovich Kaminsky, Oksana Vladimirovna Tolda, Anton Yurievich Logachev, Irina Nikolaevna Vishnyakova, Egor Vladimirovich Kapitanov, and Elena Nikolaevna Surzhikova.

Transactions without a clear economic sense among Group 1 participants were conducted at PJSC Moscow Exchange (hereinafter, the ‘Exchange’) from 31 October 2017 to 21 May 2018 based on instructions with identical price and volume parameters, while counterparties’ orders were entered into the trading system at minimum intervals. The circumstances surrounding the transactions and the nature of trading behaviour are indicative of a collusion between the above-mentioned persons. The actions of Group 1 participants were meant to give the impression of trading activity and led to anomalous Share price growth. As a result, other Share market participants were misled as to the price of the Shares.

The above-mentioned trades over accounts of Group 1 participants were made by G.S. Stefanov, who had entered into an information service agreement (hereinafter, the ‘Agreement’) with a major securities market participant (hereinafter, the ‘Company’). As part of the Agreement, G.S. Stefanov, among other things, provided the Company with such services as finding clients who would be ready to enter into a service agreement with the Company and advising them on Company activities. In particular, within the framework of the Agreement, the Company entered into service agreements with individuals comprising Group 1. Moreover, the Company provided G.S. Stefanov with compensation in the form of a percentage of the commission paid to it by clients brought by G.S. Stefanov.

To conduct transactions over Group 1 participants’ accounts, G.S. Stefanov used the software provided to one of Group 1 participants. Trading accounts were connected to the software based on standard powers of attorney executed by Group 1 participants. At the same time, G.S. Stefanov conducted transactions over his own account opened with another professional securities market participant.

The investigation of trades in the Shares market on the Exchange also revealed Shares market manipulation transactions conducted in collusion between Igor Muratovich Takoev and Snezhana Aleksandrovna Zhdanova (Group 2). These persons’ trading accounts were opened with different professional securities market participants. Instructions to conduct mutual transactions from 22 December 2016 to 22 May 2017 were given by I.M. Takoev who obtained a positive financial result from trades with S.A. Zhdanova. These transactions resulted in a significant deviation of the price of Shares.

Operations conducted by Group 1 in the Shares market are classified as market manipulation under Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the ‘Federal Law’) and under Clause 6 of Part 1 of Article 5 of the Federal Law. Operations conducted by Group 2 are classified as market manipulation under Clause 2 of Part 1 of Article 5 of the Federal Law.

The Bank of Russia has taken a set of measures to put an end to the violations of the Federal Law by persons involved in the Shares market manipulation, including in line with the provisions of the Russian Federation Code of Administrative Offences.

Facts of securities market manipulation by V.V. Fedorin established

30^thMay

The Bank of Russia has established facts of market manipulation in 17 low-liquid securities (including shares and bonds) in the period from 2011 through 2017 committed by Vladislav V. Fedorin via the unscrupulous use of assets in other persons’ broker accounts.

Being a staff member and a representative of large broker organisations in Chelyabinsk, and possessing experience in transactions with financial instruments, V.V. Fedorin obtained passwords to broker accounts from two individuals (hereinafter, the Principals) having trust-based relations with them. V.V. Fedorin used the Principals’ assets to conduct transactions in organised trading in the markets of 27 low-liquid securities.

As a result of deliberate transactions concluded in organised trading between the Principals’ broker accounts, on the one hand, and his own broker account, as well as the broker account of his spouse, Olga A. Averyanova, on the other hand, V.V. Fedorin bought the securities of his Principals at underestimated prices on several occasions. Further on, he derived income from the sale of these securities at overestimated prices; and he also sold securities to the Principals at higher prices compared to the market ones.

According to the Bank of Russia’s calculations, the above-mentioned securities transactions led to losses totalling over 5.5 million rubles for the Principals. This being the case, it was impossible for the damaged persons to independently find out that the transactions with their assets had been beneficial for V.V. Fedorin and his spouse because of the anonymous nature of trading.

Transactions between the said persons in the markets for 17 out of 27 securities, which have caused significant deviations in trading parameters, are categorised as market manipulation under Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’.

The Bank of Russia has submitted the investigation materials to law enforcement authorities. It has also taken measures against the persons involved in bond market manipulation to prevent similar violations in future. The Bank of Russia decided to cancel the qualification certificates of a financial market specialist issued to V.V. Fedorin.

Facts of manipulation in the market for ordinary shares of PJSC ASKO-STRAKHOVANIE established

22^th May

The Bank of Russia has established facts of manipulation in/during organised trading (hereinafter, the Exchange) in the market for ordinary shares of PJSC ASKO-STRAKHOVANIE in 2017–2018 (hereinafter, the Shares) by a group of persons from the Chelyabinsk Region.

Transactions with the Shares were conducted on the Exchange across the broker accounts of OK—Finance LLC (TIN 7453268383), Gleb A. Ivanov, Artem A. Kryukov, Arseniy V. Bakaev, Mikhail A. Del, Mikhail A. Dobrovolskiy, Sergei Ye. Grigoriev, Elena A. Zhuravleva, Ivan I. Fait, Igor O. Zvonarev, Svetlana V. Ivanova, and Alexander N. Chernyshov (hereinafter, the Group).

The operations were coordinated by A.A. Kryukov, employee of OK—Finance LLC, a company affiliated with Aleksey D. Ovakimyan, a member of the Supervisory Board and an insider of PJSC ASKO-STRAKHOVANIE, who, among other things, used special software allowing similar trade operations to be conducted across several accounts. Individuals’ trading accounts were connected to the software provided by A.A. Kryukov on the basis of powers of attorney issued by a professional securities market participant.

Over the period from 11 July 2017 through 27April 2018, transactions involving this Group represented over 50% of the total Shares trading volume. Shares transactions conducted inside the Group repeatedly led to considerable deviations in the trading volume and Shares price on the Exchange. Besides, the transactions conducted by A.A. Kryukov, G.A. Ivanov and OK—Finance LLC maintained the Share price at a level that differed considerably from the level that would have been otherwise achieved in the absence of such transactions. As a result, other Shares market participants were misled as to the Share price, and the mechanism of fair pricing on the Exchange was distorted.

The established relations between these persons, including those with the Share issuer, as well as the mechanism of executing trades on the Exchange in the period following the Shares’ placement, shows that the Group’s operations were aimed at the artificial creation and maintenance of trading activity in the Shares market.

These operations, conducted by the Group in the Shares market, are qualified as market manipulation under Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law). The actions performed by OK—Finance LLC, G.A. Ivanov and A.A. Kryukov are also qualified as market manipulation under Clause 6 of Part 1 of Article 5 of the Federal Law.

The Bank of Russia has taken a set of measures to put an end to the violations of the Federal Law by persons involved in the Shares market manipulation, inter alia in line with the provisions of the Russian Federation Code of Administrative Offences.

The Bank of Russia calls for close control of clients’ operations by professional securities market participants in order to eliminate all and any chance of quasi-trust management on the basis of powers of attorney and the associated risks of violating the Federal Law.

Facts of manipulation in the market for ordinary shares of PJSC ChZPSN-Profnasteel, PJSC OGK-2, PJSC RAZGULAY Group, PJSC Ashinskiy Metzavod and PJSC Tuchkovskiy KSM established

22^th May

The Bank of Russia has established facts of manipulation in organised trading (hereinafter, on the Exchange) in the market for ordinary shares of PJSC ChZPSN-Profnasteel, PJSC OGK-2, PJSC RAZGULAY Group, PJSC Ashinskiy Metzavod and PJSC Tuchkovskiy KSM (hereinafter, jointly the Securities) in 2015–2017.

Securities transactions were conducted on the Exchange across the broker accounts of the clients of a professional securities market participant: by Nadezhda A. Karabintseva, Konstantin V. Izvekov, Yapi Trade LLC (TIN 7453268320), Dmitry A. Karabintsev and several individuals related to them (hereinafter, the Individuals).

The Bank of Russia revealed similar-in-type colluded operations with the Securities, whereby the Individuals’ transactions affected the Securities’ prices in trading on the Exchange and created favourable conditions for buying/selling considerable blocks of the Securities by N.A. Karabintseva and K.V. Izvekov with profit.

As a result of 27 series of such operations, N.A. Karabintseva and K.V. Izvekov managed to derive a total income exceeding 120 million rubles. Eventually, the Individuals may highly likely have incurred comparable losses due to the fact that their assets had been involved in the said operations.

As part of the mentioned series of operations, over 400 Securities transactions conducted between N.A. Karabintseva and K.V. Izvekov, on the one side, and the Individuals, on the other side, caused considerable deviations in the trading volume of Securities .

In the course of its investigation, the Bank of Russia found out that, in all probability, it was D.A. Karabintsev who was behind the coordinated submission of instructions by the mentioned persons to make transactions, because the Individuals entrusted him with passwords to their own online broker accounts.

The investigation also revealed that D.A. Karabintsev made transactions with the ordinary shares of PJSC ChZPSN-Profnasteel and PJSC OGK-2 between his own broker account and the account of Yapi Trade LLC he controlled. These transactions led to considerable deviations in trading parameters of the Securities.

The mentioned Securities transactions conducted across the accounts of Yapi Trade LLC, D.A. Karabintsev, N.A. Karabintseva, K.V. Izvekov and the Individuals are categorised as Securities market manipulation under Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law).

The Bank of Russia has forwarded the findings of the investigation to law enforcement agencies.

The regulator calls attention to serious risks of violating the Federal Law, associated with third parties gaining access to broker accounts thanks to the key information they receive.

Facts of manipulation in the market for ordinary shares of PJSC RPC UWC established

30^th April 2019

The Bank of Russia has established facts of repeated and continuous market manipulation on an organised trading venue(hereinafter, the Exchange) for ordinary shares of PJSC RPC UWC (hereinafter, the Shares) conducted by non-resident companies GorTec Management Ltd (incorporated in Belize) and GTCP TRADING LTD (incorporated in the Republic of Cyprus) from 3 October 2016 to 2 May 2017.

The mutual purchase and sale transactions with the Shares, concluded between GorTec Management Ltd and GTCP TRADING LTD (hereinafter, the Companies), were devoid of clear economic sense and aimed at maintaining certain level of price and trading volume of the Shares. On the days of absence at trading sessions of major Shares market participants, including the ones interconnected with the Shares’ issuer, the proportion of the Companies in total trading volume averaged 30% to 50%. According to the Exchange, during the Period, the Companies conducted 275 transactions with the Shares with a significant deviation in trading volume.

In the course of its investigation, the Bank of Russia obtained technical and other data pointing to the fact that trading accounts of both Companies were managed by Aleksei S. Dokuchaev who offered market-making services via controlled Gorod Tekhologiy LLC and the website.

These transactions of the Companies in the Shares market are classified as the market manipulation and the violation of the ban under Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law).

However, the existence of a bilateral agreement between GTCP TRADING LTD and Otkrytie Broker JSC, a professional securities market participant, on the role of GTCP TRADING LTD in maintaining the Shares prices/quotes in both directions (buy/sell) does not create any legally important grounds allowing this company to act as a market-maker, and, therefore, prevents it from using the exemption set forth by Clause 3 of Part 3 of Article 5 of the Federal Law.

Over the Period, the Shares were actively purchased by several management companies operating for the account of non-governmental pension funds at the price formed at organised trading. The Bank of Russia has every reason to expect that the Share prices during the Period were maintained via manipulations in part for the purpose of improving the Shares’ investment appeal and supporting the long-term holding of the blocks of Shares by management companies within the assets of non-governmental pension funds.

The Bank of Russia also established the case when the additional issue of Shares was bought by a management company using the pension savings of a non-governmental pension fund for over 5 billion rubles via the intermediation of several non-resident companies, including UNITED WAGON PLC (Jersey) affiliated with PJSC RPC UWC. The difference between the prices for Shares purchased by non-resident companies to place them further and the prices for Shares sold to the management companies of a non-governmental pension fund made it possible for these intermediaries to derive 328 million rubles in income.

The well-coordinated activities of participants in these transactions, as well as the return thereon of non-resident companies ranging from 444% to 499% p.a., suggest a possible scheme aimed at diverting a part of non-governmental pension funds’ assets to the accounts of non-resident companies. Upon placing the Shares of the additional issue at a considerable discount, PJSC RPC UWC in turn did not receive a part of its funds invested in the Shares.

The Bank of Russia has submitted the investigation materials to law enforcement authorities.

On establishing facts of bond markets manipulation

25^th April 2019

The Bank of Russia has established manipulation of bond markets during organised trading under the scheme aiming to illegally withdraw pension savings from INPF AKVILON OJSC managed by TRINFICO Asset Management JSC.

The Bank of Russia’s investigation has established operations in the bond markets of 68 issuers allegedly conducted in collusion during the period from 10 March 2015 through 22 December 2015 (hereinafter, the Period) by KIT Finance Trade (LLC) and TRINFICO Asset Management JSC, acting as the trust manager of pension savings of INPF AKVILON OJSC (hereinafter, the Fund).

The bond transactions were conducted between the said persons in the main trading mode on the Moscow Exchange brokered by professional securities market participants KIT Finance (JSC) and CJSC TRINFICO on the basis of anonymous buy orders. It was established that during the Period the counterparties recurrently employed a well-coordinated scheme aimed at illegal funds withdrawal from the Fund.

Under this scheme, operations to buy/sell bonds were conducted, as a result of which KIT Finance Trade (LLC) systemically derived income from price differences as the management company concluded transactions unprofitable for the Fund.

Transactions with the bonds of 13 issuers, which have caused significant deviations in the price and trading volume, are qualified as market manipulation under Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’.

The Bank of Russia estimates that the total income of KIT Finance Trade (LLC) derived from the said operations with TRINFICO Asset Management JSC during the Period reached at least 57 million rubles, including 6 million rubles from the operations qualified as market manipulation. Due to the systemic sale of bonds at prices below the purchase price, the Fund may in turn sustain comparable losses.

The trade behaviour patterns of TRINFICO Asset Management JSC in the course of the management of the Fund’s assets when conducting operations with other counterparties differed from the said operations with KIT Finance Trade (LLC) (there were no scheme actions). As a result, during the same Period of the management of the Fund, the total financial result of operations with other counterparties, excluding KIT Finance Trade (LLC), was positive.

The Bank of Russia established that operations with the bonds under investigation had been conducted by Vadim G. Dorofeev, the head of the Division of Broker Operations at KIT Finance (JSC) and another employee of the said Division, who acted on the instruction of V.G. Dorofeev. The said employees of the broker acted on the basis of the power of attorney when conducting operations on behalf of KIT Finance Trade (LLC).

On the part of TRINFICO Asset Management JSC, instructions to conduct operations with bonds for the account of the Fund’s pension savings were submitted by Farit Kh. Zakirov, who headed the pension savings management division, UIF and NPF asset management at TRINFICO Asset Management JSC and the sales unit (broker services) at CJSC TRINFICO.

During the Period, F.Kh. Zakirov was also Chairman of the Investment Committee of TRINFICO Asset Management JSC. As proposed by F.Kh. Zakirov, this body made decisions to reduce the share of bonds in the Fund’s portfolio and to establish stop-loss limits on the Fund’s bonds. Being in charge of controlling limits and closing positions, F.Kh. Zakirov performed bond operations which were loss-making for the Fund.

The Bank of Russia decided to cancel the qualification certificates of financial market specialists issued to F.Kh. Zakirov and V.G. Dorofeev. Additionally, the Bank of Russia is conducting the assessment of activity of TRINFICO Asset Management JSC.

The materials of the investigation have been submitted to law enforcement authorities.

On establishing facts of manipulation in the market for certain securities by D.E. Berger

6^th December

The Bank of Russia has established multiple and lasting cases of manipulation of markets for 50 securities during the period from 3 February 2014 to 26 January 2017 conducted by Dmitry Eduardovich Berger, an employee of management company JSC Sberbank Asset Management.

D.E. Berger, who was authorised to perform securities transactions on behalf of JSC Sberbank Asset Management, systematically conducted collusive trades with a narrow range of corporate counterparties (hereinafter referred to as Counterparties) for the account of JSC Sberbank Asset Management as well as unit investment funds, the Pension Fund of the Russian Federation and FGKU ROSVOENIPOTEKA.

D.E. Berger also conducted similar transactions on behalf of the management company LLC UK Pensionnye Nakopleniya within the context of managing pension savings and pension reserves of JSC NPF of Sberbank.

These transactions were conducted during the period in question in accordance with the following scheme. A Counterparty made a purchase or a short sale transaction with a certain amount of securities at market prices and afterwards placed a limit order to close this new position with a profit. Usually, an Iceberg order was placed (an order with a hidden amount). After a short period of time (usually, less than a minute), D.E. Berger, acting on behalf of JSC Sberbank Asset Management or LLC UK Pensionnye Nakopleniya, placed one or several orders at prices that would ensure closing the Counterparty’s position with a profit.

This trading practice resulted in short-term substantial fluctuations in the prices of financial instruments as well as significant deviations in their trade parameters, and allowed Counterparties to receive a positive financial result.

According to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law), transactions conducted by D.E. Berger in the period between 3 February 2014 and 26 January 2017 on behalf of JSC Sberbank Asset Management and LLC UK Pensionnye Nakopleniya as well as the above-mentioned collusive acts of legal entities which resulted in a substantial deviation in the trading parameters of securities are qualified as market manipulation.

As a result of conducting over 1,000 of series of such transactions, Counterparties received an income of more than 150 million rubles, which, in accordance with the Criminal Code of the Russian Federation, is qualified as excessively large. At the same time, both JSC Sberbank Asset Management and entities managed by JSC Sberbank Asset Management and LLC UK Pensionnye Nakopleniya suffered losses of at least comparable size.

The Bank of Russia has sent the investigation materials confirming direct involvement of D.E. Berger in market manipulation to law enforcement authorities.

On establishing facts of manipulation in the market for investment units of Closed-end Equity Unit Investment Fund Finam – Information Technologies

27^thAugust

The Bank of Russia established the fact of manipulation in the market for investment units of Closed-end Equity Unit Investment Fund Finam — Information Technologies managed by LLC Management Company Finam Management (hereinafter, the Units) during trading at PJSC Moscow Exchange (further referred to as the Exchange) in 2012-2015.

The operations, qualified as manipulation of the Unit market, were conducted in collusion by BROFAM ASSETS LIMITED (currently VERFARM HOLDING LTD), GOSTEMISO TRADING LTD (both foreign companies incorporated under the law of the Republic of Cyprus), Vionmane Ltd (incorporated under the law of the Seychelles), Alexander Aleksandrovich Lebedev, Tatiana Leonidovna Zemlyanskaya, Alexander Nikolaevich Zemlyansky, Nadezhda Mikhaylovna Arshinova, Alexey Ivanovich Belevtsev, Svetlana Alekseevna Dyatlova, Alexey Sergeyevich Mineev, Evgeny Viktorovich Filippov, Georgy Aleksandrovich Obukhov, Vyacheslav Viktorovich Sitkov, Valery Gennadievich Sukhanov, Alexander Aleksandrovich Semenyak, Alexander Vladimirovich Shandula, Dmitry Valeryevich Mamonov.

Registered were repeated mutual purchase and sale transactions with the Units which made no economic sense and which as a rule occurred on the basis of orders with identical price and volume parameters, with the purpose of creating misleading appearance with respect to the price of the Units. The actions taken by the above persons brought about artificially maintained Unit market, with the purpose of creating a desired quote the Exchange subsequently recorded at the time the market price was being calculated.

Meanwhile, acting as a market maker with regard to the Units based on agreements with the management company was JSC FINAM, which assigned these functions to some of its customers including those of the second level. The market price of the Units, resulting from the above group of persons’ actions, was used by JSC FINAM and JSC Bank FINAM to record the cost of the Units in the balance sheet as their equity.

Some of the above individuals authorised JSC FINAM employees to make transactions with the Units. Transactions with the Units (purchase and sale with a minimum income) for some JSC FINAM customers were funded by transfers from a bank account held in LLC Investment Company FINAM (the name of the latter was then changed to LLC Investment Company PRIME CAPITAL) to JSC FINAM Bank.

Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law), the actions taken by BROFAM ASSETS LIMITED (VERFARM HOLDING LTD), GOSTEMISO TRADING LTD, Vionmane Ltd, A.A. Lebedev, T.L. Zemlyanskaya, A.N. Zemlyansky, N.M. Arshinova, A.I. Belevtsev, S.A. Dyatlova, A.S. Mineev, E.V. Filippov, G.A. Obukhov, V.V. Sitkov, V.G. Sukhanov, A.A. Semenyak, A.V. Shandula and D.V. Mamonov are qualified as Unit market manipulation. According to Clause 6, Part 1, Article 5 of the Federal Law, the actions of BROFAM ASSETS LIMITED (VERFARM HOLDING LTD), GOSTEMISO TRADING LTD, Vionmane Ltd and T.L. Zemlyanskaya, were made with the purpose of creating misleading appearance with respect to the price of the Units, are as well qualified as Unit market manipulation..

The above-mentioned persons violated the breach of the prohibition set out in Part 2, Article 6 of the Federal Law.

The Bank of Russia took relevant measures with respect to the persons engaged in manipulation of the Unit market, aimed at preventing such violations in the future.

On establishing facts of manipulation in the market for investment units of Closed-end Rental Unit Investment Fund Finam – Capital Investment managed by B&N FINAM Group Asset Management LLC during trading at PJSC Moscow Exchange

27^thAugust

The Bank of Russia established the fact of manipulation in the market for investment units of Closed-end Rental Unit Investment Fund Finam — Capital Investment managed by B&N FINAM Group Asset Management LLC (hereinafter, the Units) during trading at PJSC Moscow Exchange (further referred to as the Exchange) in 2013-2015.

The operations, qualified as manipulation of the Unit market, were conducted in collusion by Evgeny Vladimirovich Agapov, Viktor Anatolievich Stavitskiy, Aleksey Aleksandrovich Pechenikin, Yulia Aleksandrovna Zubtsova, Vladimir Vladimirovich Bondarenko, Emil Aslanovich Babaev, Vladimir Olegovich Tishin, Vladimir Viktorovich Fomichev, BROFAM ASSETS LIMITED (incorporated under the law of Cyprus, currently VERFARM HOLDING LTD), Vionmane Ltd (incorporated under the law of the Seychelles), KIT Finance Invest (LLC), KIT Finance Trade (LLC) and EFNS-GROUP LLC.

The Bank of Russia registered multiple mutual purchase and sale transactions with the Units which lacked clear economic sense and were closed on the basis of orders with similar price and volume parameters. The above persons’ actions were meant to give the impression of running trading activity and liquidity in the market of the Units, with the purpose of, inter alia, attracting third-party investors, artificially shaping and maintaining the price of the Units.

Meanwhile, acting as a market maker with regard to the Units based on agreements with the management company was JSC FINAM, which assigned these functions to some of its customers including those of the second level. The Bank of Russia’s investigation established that trading in the market of the Units by the above persons was coordinated by JSC FINAM employees Aleksey Anatolievich Lysogor and Igor Sergeevich Belyasov.

The above-mentioned persons violated the breach of the prohibition set out in Part 2, Article 6 of the Federal Law.

The Bank of Russia took relevant measures with respect to the persons engaged in manipulation of the Unit market, aimed at preventing such violations in the future.

On establishing facts of manipulation in the market for shares of foreign issuer Polyus Gold International Limited, markets for ordinary shares of PJSC Platform UTINET.Ru and PJSC TPG AESSEL during trading at PJSC Moscow Exchange

27^thAugust

The Bank of Russia established the facts of manipulation in the market for shares of foreign issuer Polyus Gold International Limited, and the markets for ordinary shares of PJSC Platform UTINET.Ru and PJSC TPG AESSEL (hereinafter jointly referred to as the Shares) during trading at PJSC Moscow Exchange (hereinafter, the Exchange) in 2013–2016.

The operations, qualified as manipulation of the Share market, were conducted in collusion by BROFAM ASSETS LIMITED (currently VERFARM HOLDING LTD), EVELSIA TRADING LTD (both foreign companies incorporated under the law of the Republic of Cyprus) and Vionmane Ltd (incorporated under the law of the Seychelles). Meanwhile, acting as a market maker with regard to the Shares based on agreements with the Share issuers was JSC FINAM, which actually assigned these functions to some of its customers including those of the second level.

The mutual purchase and sale transactions with the Shares, which had no economic sense, were executed by the above persons on the basis of orders with identical price and volume parameters and a small time lag between the orders. The actions taken by these persons gave the impression of running trading activity and liquidity in the Share market, inter alia, in order to attract third-party investors and shape and maintain the prices of the Shares.

The Bank of Russia’s investigation also revealed that in 2015-2016 Ivan Aleskandrovich Ivanov and Vyacheslav Aleksandrovich Ivanov by prior agreement used algorithmic trading to carry out operations with ordinary shares of PJSC TPG AESSEL, which resulted in considerable deviations in the share prices of PJSC TPG AESSEL.

Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law), the actions taken by BROFAM ASSETS LIMITED (VERFARM HOLDING LTD), EVELSIA TRADING LTD and Vionmane Ltd are qualified as market manipulation in the Shares. Under Clause 6, Part 1, Article 5 of the Federal Law, the actions of these entities were made with the purpose of creating misleading appearance with respect to the price of ordinary shares of PJSC TPG AESSEL, and are as well qualify as market manipulation of ordinary shares of PJSC TPG AESSEL.

According to Clause 2, Part 1, Article 5 of the Federal Law, the actions taken by I.A. Ivanov and V.A. Ivanov qualify as market manipulation of ordinary shares of PJSC TPG AESSEL.

The above-mentioned persons violated the breach of the prohibition set out in Part 2, Article 6 of the Federal Law.

The Bank of Russia took relevant measures with respect to the persons engaged in manipulation of the Share market, aimed at preventing such violations in the future.

On establishing facts of manipulation in the market for ordinary shares of OJSC Levenhuk during trading at PJSC Moscow Exchange

27^thAugust

The Bank of Russia established the fact of manipulation in the market for ordinary shares of OJSC Levenhuk (hereinafter, the Shares) during trading at PJSC Moscow Exchange (hereinafter, the Exchange) in 2012–2016.

The operations, qualified as manipulation of the Share market, were conducted in collusion by Maksim Eduardovich Kleshchunov, Maria Anatolievna Kaminskaya, Andrey Aleksandrovich Gusev, Irina Ivanovna Guseva, Denis Ivanovich Maryechkin, LLC Levenhuk, OJSC Smart Broker, LLC EXPERT RELATION and Triolima Corporation (incorporated under the law of the Seychelles). The above group of persons was formed out of the issuer’s and its controlled companies’ staff, its listing agent and related parties. Some members of the group issued powers of attorney with respect to transactions with the Shares for employees of JSC FINAM, which was acting as the market maker with regard to the Shares.

Registered were repeated mutual purchase and sale transactions with the Shares which had no economic sense and which as a rule occurred on the basis of orders with identical price and volume parameters, with the purpose of creating misleading appearance with respect to the price of the Securities. The operations of the above-mentioned group of persons accounted for over 75% of trading in the Shares at the Exchange in the above period. This gave the impression of running trading activity and liquidity in the market of the Shares aimed at, among other things, attracting investors. Meanwhile, the price of the Shares was maintained at the level sufficiently different from the level which could have been formed without these transactions.

Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law), the actions taken by M.E. Kleshchunov, M.E. Kaminskaya, A.A. Gusev, I.I. Guseva, D.I. Maryechkin, LLC Levenhuk, OJSC Smart Broker, LLC EXPERT RELATION and Triolima Corporation are qualified as market manipulation of the Shares. According to Clause 6, Part 1, Article 5 of the Federal Law, the actions of M.E. Kleshchunov, M.E. Kaminskaya, I.I. Guseva and D.I. Maryechkin, were made with the purpose of creating misleading appearance with respect to the price of the Shares, and are as well qualify as market manipulation of the Shares.

The above-mentioned persons violated the breach of the prohibition set out in Part 2, Article 6 of the Federal Law.

The Bank of Russia took relevant measures with respect to the persons engaged in manipulation of the Share market, aimed at preventing such violations in the future.

On establishing facts of manipulation in the market for ordinary shares of PJSC VTORRESURSY during trading at PJSC Moscow Exchange

27^thAugust

The Bank of Russia established the fact of manipulation in the market for ordinary shares of Public Joint-stock Company VTORRESURSY (hereinafter, the Shares) during trading at PJSC Moscow Exchange (hereinafter, the Exchange) in 2012–2016.

The operations, qualified as manipulation of the Share market, were conducted in collusion by LLC SKYINVEST Securities, LLC Investment, LLC Sfera, LLC Demish, LLC San Production, LLC StalProm, LLC SMART Company, by Andrey Aleksandrovich Gusev, Denis Ivanovich Maryechkin, Alexey Borisovich Yashin, Tatyana Evgenyevna Chertkoyeva, Tatyana Vladimirovna Stolyarova, Andrey Aleksandrovich Shumilov, Stanislav Dmitriyevich Kurnayev, Stanislav Evgenyevich Tereshchenko and Sergey Sergeyevich Lebedev. The above group of persons was formed out of the issuer’s and its controlled companies’ staff, its listing agent and related parties. Some members of the group issued powers of attorney with respect to transactions with the Shares for employees of JSC FINAM, which was acting as the market maker with regard to the Shares.

Transactions conducted by the group of persons brought about artificial volatility in the Share market with the purpose of attracting market participants that followed a speculative strategy. Meanwhile, the price of the Shares was maintained at the level sufficiently different from the level which could have been formed without these transactions. The resulting quotation of the Shares was subsequently used by one of the participants involved in market manipulation in order to attract loans from third persons as collateral to the Shares.

Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the ‘Federal Law’), the actions taken by LLC SKYINVEST Securities, LLC Investment, LLC Sfera, LLC Demish, LLC San Production, LLC StalProm, LLC SMART Company, A.A. Gusev, D.I. Maryechkina, A.B. Yashina, T.E. Chertkoyeva, T.V. Stolyarova, A.A. Shumilova, S.D. Kurnayeva, S.E. Tereshchenko, S.S. Lebedeva are qualified as market manipulation of the Shares. According to Clause 6, Part 1, Article 5 of the Federal Law, the actions taken by T.V. Stolyarova, T.E. Chertkoyeva, D. I. Maryechkin, A.B. Yashina, LLC Investment, LLC StalProm and LLC Sfera were made with the purpose of creating misleading appearance with respect to the price of the Shares, and are as well qualify as market manipulation of the Shares.

The above mentioned persons violated the breach of the prohibition set out in Part 2, Article 6 of the Federal Law.

The Bank of Russia took relevant measures with respect to the persons engaged in manipulation of the Share market, aimed at preventing such violations in the future.

On establishing fact of PJSC ETS stock market manipulation

29^thJune

The Bank of Russia established the fact of manipulation of Public Joint-stock Company Uniform Techno Systems ordinary shares (hereinafter, the Shares) during trading on PJSC Moscow Exchange (hereinafter, the Exchange) in 2015–2017.

The Bank of Russia’s investigation established that several persons related with each other and with PJSC ETS, i.e. Denis A. Litvinov, Aleksey S. Lashkov, Denis S. Zelenya, Andrey Yu. Yakovlev, LLC Omega-Trade, during trading on the Exchange, acting on the basis of a preliminary agreement, conducted trades in the Shares which did not have clear economic sense.

In course of simulation of trades the Bank of Russia established that the mentioned persons made a significant influence on the Shares price on the Exchange. This influence aimed at misleading other participants as to the market situation and the Shares price, and at creating misliding trading activity and increasing the demand among a wide range of investors.

According to the data provided by the Exchange, the trades conducted by D.A. Litvinov, A.S. Lashkov, D.S. Zelenya, A.Yu. Yakovlev and LLC Omega-Trade in the main trading mode on the Exchange resulted in a substantial deviation in the Shares trading parameters.

The actions taken by D.A. Litvinov, A.S. Lashkov, D.S. Zelenya, A.Yu. Yakovlev and LLC Omega-Trade are qualified as manipulation for the Share market according to Section 2 and 6 of Part 1 of Article 5 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law). The above mentioned persons violated the ban imposed by Part 2, Article 6 of the Federal law.

Besides, in the course of a comprehensive examination of the activities of PJSC ETS, it was established that the Shares of the main issue were mainly paid by a 100% stake of LLC Amkodor-Optim Saint Petersburg (hereinafter, the Company). Upon considering the market value assessment report of the stake totalling 100% of the authorised capital of LLC Amkodor-Optim Saint Petersburg, the Bank of Russia identified signs of misuse committed during the reporting, which mislead as to the financial standing of the Company and the reliability of calculations. Therefore, the true financial standing of PJSC ETS and the actual value of the Shares were misrepresented.

Another objective of PJSC ETS was to place an additional issue of Shares, which were to be paid by the stakes of LLC Group of Companies Mir Privoda, LLC Sila Tekhniki and LLC Korporatsiya Aktiv (hereinafter, the Companies), which had not been properly evaluated.

The Bank of Russia requested the self-regulatory organisation of appraisers (hereinafter, the SROA) to examine the evaluation activities of the appraiser which had prepared reports on the evaluation of the market value of stakes in the share capitals of the Companies. Besides, the SROA was to provide its professional judgement about the quality of reports, their compliance with the requirements of Federal Law No. 135-FZ, dated 29.07.1998, ‘On Appraisal Activities in the Russian Federation’, federal appraisal standards, appraisal standards and rules of a self-regulatory organisation, and also compliance with the rules of business and professional ethics. Based on the unscheduled examination of the appraiser’s activities during the preparation of appraisal reports on the Companies, the SROA confirmed the existence of violations in these reports and their non-compliance with legislative requirements on appraisal activities.

As a result of measures taken, the shares of the additional issue of PJSC ETS were not placed and the securities issue was recognised void.

The Bank of Russia took appropriate measures regarding the persons engaged in market manipulation aimed at preventing similar violations in future, including the blocking of their trading accounts.

The SROA applied disciplinary sanctions against the appraiser which had committed material misstatement in the appraisal reports on assets value.

On establishing facts of insider trading by E.T. Marlamov

18^thApril

The Bank of Russia has established that a client of JSC FINAM (AO Finam), Elvis T. Marlamov, systematically used insider information of JSC FINAM to perform trades in the markets of 29 liquid securities at the Moscow Exchange within the period from 8 June 2016 to 22 February 2018.

During the investigation, the Bank of Russia established that E. Marlamov is the author of a number of trading strategies used by JSC FINAM’s clients as part of the ‘Autofollow’ service.

Using the information in his subscribers’ orders on price parameters and order direction (buy/sell) that would affect the market price of securities and analysing the market reaction to such orders, E. Marlamov repeatedly conducted trades across his own isolated accounts (the accounts without subscribers opened mostly with JSC FINAM) with the same securities. From 8 June 2016 to 22 February 2018, this activity allowed E. Marlamov to receive a substantial profit.

In accordance with the the legislation of the Russian Federation on countering the misuse of insider information and market manipulation, the information used by E.Marlamov to conduct such trades was qualified as insider information of the professional securities market participant JSC FINAM. E. Marlamov systematically violated the prohibition set forth in Article 6, Section 1.1 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’.

In accordance with the Criminal Code of the Russian Federation, the profit gained by E. Marlamov from securities transactions conducted using insider information is qualified as excessively large profits, which creates prerequisites for a criminal qualification of E. Marlamov’s activities as provided by law.

The Bank of Russia also notices that E. Marlamov’a activities can be viewed as misconduct with respect to subscribers to his trading strategies who took a decision to join the service expecting it would comply with legal and ethical standards.

In line with the Bank of Russia order, to prevent illegal activity, E. Marlamov was suspended from conducting securities transactions at the Exchange.

The Bank of Russia will send relevant investigation materials to the law enforcement authorities and impose other enforcement measures with respect to E. Marlamov.

On establishing facts of market manipulation of PJSC IC Rosgosstrakh ordinary shares during trading at PJSC Moscow Exchange

11^th April

The Bank of Russia established the fact of market manipulation of PJSC IC Rosgosstrakh ordinary shares (further referred to as the Shares) during trading at PJSC Moscow Exchange (further referred to as the Exchange) in the period from 10 December 2013 through 28 April 2016 (further referred to as the Period).

The Bank of Russia’s investigation established that transactions in the Shares at the Exchange were conducted on the basis of a preliminary agreement, resulting in a substantial deviation in the trading parameters of the Shares. The following individuals were involved: Artyom I. Perkin, Kafiya A. Davlyatshina, Filipp A. Khomenok and Alexei S. Denisov.

The above-mentioned individuals’ actions facilitated continuous artificial maintaining of the price level of the Shares, in which considerable investments of non-governmental pension funds and individuals were made.

Importantly, within the Period, Artyom Perkin placed orders to trade the Shares based on an agreement concluded with a professional securities market participant officially acting as a market maker for the Shares.

However, the exemptions stipulated in Article 5, Section 3.3 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (further referred to as Federal Law No. 224-FZ) do not cover the actions of Artyom Perkin. As a client of a professional securities market participant, this individual was not a party to a market maker agreement, and his actions could not have been aimed at maintaining the Share trading under a relevant agreement.

The actions taken by Artyom I. Perkin, Kafiya A. Davlyatshina, Filipp A. Khomenok and Alexei S. Denisov are qualified as manipulation for the Share market in accordance with Article 5, Sections 1.2 and 1.6 of Federal Law No. 224-FZ.

Starting from April 2016, the professional securities market participant acting as a market maker was the most active Share market participant. Moreover, the above period saw a sharp increase in the number of transactions involving a wide range of individuals, a large part of whom was brought in by organisations related to the issuer. The market maker’s actions alongside the increased number of the Share market participants facilitated maintaining the Share prices at the stable level.

Market manipulation including actions aimed at substantial deviations in trading parameters, as well as those to maintain trading parameters at a level otherwise unattainable is a gross violation of the requirements set forth by the legislation of the Russian Federation. Furthermore, it does not comply with the standards of professional conduct of financial market participants. With regard to the persons involved in market manipulation of the Shares, measures have been taken to prevent such actions in the future.

On establishing facts of liquid securities market manipulation by a group of individuals

13^thDecember

The Bank of Russia established the fact of manipulation of 46 securities markets during trading on the PJSC Moscow Exchange (the Exchange) in the period between 24 July 2014 and 21 March 2017 by a group of individuals including Evgeniy Tarubarov, managing director of Bonum Capital LLC, professional securities market participant, and his spouse Svetlana Tarubarova.

The Bank of Russia established that Mr Tarubarov conducted transactions both across the accounts held by Bonum Capital LLC and a brokerage account held by his spouse with one of the major professional securities market participants.

These transactions employed the following scheme. Mr Tarubarov used the brokerage account of Mrs Tarubarova to bid for an arm’s length purchase of securities on the Exchange. Then Mr Tarubarov placed a sell order to close the position at a higher price (above the highest demand price). After that, Mr Tarubarov used the accounts of Bonum Capital LLC to place a matching buy order with similar parameters that was largely covered by the bid previously placed through the account of Mrs Tarubarova.

This trading conduct led to substantial deviations in the securities trading parameters.

Thus, Mr Tarubarov could buy and sell securities across the account of Mrs Tarubarova almost without losses and generated excess income amounting to more than 10 million rubles while inflicting a comparable detriment to Bonum Capital LLC and its clients under trust management. The Criminal Code of the Russian Federation qualifies the amount of the illegally obtained income as large.

According to Federal Law No. 224-FZ dated 27 July 2010 ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (the Federal Law), transactions conducted by Mr Tarubarov across the accounts of Mrs Tarubarova and Bonum Capital LLC in the period between 24 July 2014 and 21 March 2017, which resulted in a substantial deviation in the trading parameters, are qualified as market manipulation.

It should be noted that Mr Tarubarov was not authorised to conduct transactions on the Exchange on behalf of Bonum Capital LLC, and the above illegal actions proved possible as a result of insufficient control provided by authorised officials of Bonum Capital LLC.

The Bank of Russia will take appropriate corrective measures regarding individuals involved in securities market manipulation, including measures aimed at improving the internal control systems of Bonum Capital LLC.

The materials of the investigation have been submitted to the law enforcement authorities.

The Bank of Russia draws the attention of professional securities market participants to the fact that it is necessary that they effectively control the actions of their employees, create a mechanism to prevent and settle conflicts of interests; inter alia, for the purpose of excluding the possibility of unauthorised access, provided by unauthorised employees, to the software that enables conducting Exchange transactions.

On establishing fact of manipulation in the market for ordinary shares of PJSC GC ‘TNS energo’ (PAO GC “TNS energo”) during trading on PJSC Moscow Exchange (PAO Moscow Exchange)

6^th December 2017

The Bank of Russia established the fact of manipulation in the market for ordinary shares of PJSC GC ‘TNS energo’ (hereinafter the Shares) during trading on PJSC Moscow Exchange over the period from 17 June 2015 (start of trading) through 21 October 2016 conducted by a group of individuals / legal entities comprising Yury L. Ivlev, LLC GARANT ENERGO, LLC Voronezhsbyt and Dmitry V. Raskopin.

This group was engaged in coordinated actions aimed at misleading investors as to the true liquidity of and the demand for the Shares. Yu. Ivlev, LLC GARANT ENERGO, LLC Voronezhsbyt and D. Raskopin eventually conducted more than 50% of the total volume of trading in the Shares, which caused an increase in the price from 1,185 to 2,000 rubles per Share during the mentioned period.

The coordinated actions of the group were based on the fact that Yu. Ivlev, being the advisor on investment and shareholders relations at PJSC GC ‘TNS energo’, placed orders from his own trading account, as well as on behalf and for account of LLC GARANT ENERGO, LLC Voronezhsbyt and D. Raskopin. However, Yu. Ivlevwas not properly authorized to conduct trading on behalf and for account of LLC GARANT ENERGO, LLC Voronezhsbyt and D. Raskopin. D. Raskopin was also an employee of the Shares issuer; and the main party to the Shares trading, LLC GARANT ENERGO, was interrelated with PJSC GC ‘TNS energo’ and LLC Voronezhsbyt.

According to Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, a range of transactions between the mentioned parties, which resulted in a substantial deviation in the Shares trading parameters, are qualified as market manipulation.

At the same time, the actions performed by these persons were not aimed at deriving revenue directly from trading in the Shares on the Moscow Exchange.

According to the outcome of the investigation and explanations given by the Shares issuer, the company sought to increase capitalisation and expand the Shares trading in order to improve its ranking position of a listed company, which in turn could help attract funds of private investors and pension savings to reduce the debt burden of PJSC GC ‘TNS energo’.

It should be noted that trading activities across the accounts of the mentioned individuals and legal entities terminated during the period when the Bank of Russia initiated its requests to PJSC GC ‘TNS energo’, which caused a considerable decrease in the Shares price.

Market manipulation is a gross violation of the requirements set forth in the legislation of the Russian Federation. Besides, it does not comply with the standards of professional conduct of financial market participants. With regard to the persons invoved in market manipulation with the Shares, measures will be taken to prevent such actions in future.

On establishing facts of securities market manipulation by V. Prokhor and Alpari LLC (OOO Alpari)

23^thNovember

The Bank of Russia has established facts of repeated market manipulation on the Moscow Exchange (hereinafter the Exchange) with regard to trades in the ordinary shares of PJSC Human Stem Cells Institute (PAO ISKCh), PJSC Rostelecom (PAO Rostelecom), PJSC Chelyabinsk Profiled Steel Decking Factory (PAO ChZPSN-Profnastil), JSB AVANGARD (PAO AKB Avangard), PJSC Volgogradenergosbyt (PAO Volgogradenergosbyt), PJSC Uniform Techno Systems (PAO ETS), PJSC Vladimirenergosbyt (PAO Vladimirenergosbyt) and also preferred shares of PJSC Volgogradenergosbyt (hereinafter the Shares) during the period from 3 August 2015 through 25 December 2015 by Viktor G. Prokhor and Alpari LLC (TIN: 3904602244, Kaliningrad).

Transactions with the Shares conducted by V. Prokhor and Alpari LLC resulted in significant deviations in their trading parameters.

The analysis of the trading behaviour of V. Prokhor and Alpari LLC in the securities market established that series of transactions were executed in the main trading mode of the Exchange according to the following scheme. As the result of one or several trades, V. Prokhor bought a certain block of the Shares from Alpari LLC; that was followed by one or several trades with the same number of the Shares at a higher price conducted in the opposite direction. These trades were conducted against matching orders having similar parameters and with minimum difference in time, being placed from the same personal computer.

It is important to note that during the period under investigation, V. Prokhor and Alpari LLC acted as key counterparties in the trades with the Shares.

In the course of the investigation, the Bank of Russia established that V. Prokhor, being the authorised representative and beneficial owner of Alpari LLC, was individually conducting transactions in the main trading mode of the Exchange across the account held by Alpari LLC and his own account.

As a result of these transactions, V. Prokhor achieved positive financial result by inducing comparable damage to Alpari LLC. These actions were able to optimise the tax burden of the company. Information about the actions of V. Prokhor and Alpari LLC was forwarded to the Federal Tax Service.

These actions are qualified as the Share market manipulation in accordance with Article 5, Section 1.2 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter the Federal law). Thereby, V. Prokhor and Alpari LLC violated the prohibition set forth by Article 6, Section 2 of the Federal law.

Based on the outcome of the investigation, the Bank of Russia took measures to prevent market manipulation by V. Prokhor and Alpari LLC.

Professional securities market participants are recommended to consider the probability of the above actions being performed by their clients when implementing internal control compliance procedures, as well as to inform their clients about the inadmissibility of such transactions.

On establishing facts of market manipulation by D. Sheinin and I. Mulyavko

16^th November

The Bank of Russia has established multiple and continuous facts of market manipulation on MICEX SE for ordinary shares of OJSC MMK (hereinafter, the Stock) in 2015 and 2016 committed by a group of individuals consisting of Danila M. Sheinin and Irina V. Mulyavko.

As an employee of IC MMK-Finance LLC, D. Sheinin simultaneously conducted transactions across the account of the above-mentioned company and the personal brokerage account of another employee of IC MMK-Finance LLC — I. Mulyavko held with another professional securities market participant.

Performing his professional responsibilities and acting for the account and on behalf of IC MMK-Finance LLC, D. Sheinin consistently offered sell/buy bids for the Stock, which led to the drop or rise in the Stock price. He used the situation created by these actions in order to buy/sell the Stock for the account and on behalf of I. Mulyavko at minimum/maximum prices; the difference between these prices was used to generate profits. The said scheme could reiterate several times during one trading day.

This trading conduct resulted in short-term substantial fluctuations in the prices of the Stock, as well as significant deviations in their trade characteristics and allowed D. Sheinin and I. Mulyavko to achieve positive financial result totalling dozens of millions of rubles. This amount is qualified as exceptionally large profits by the Criminal Code of the Russian Federation.

To conceal the true nature of his actions, D. Sheinin used the market maker’s services provided by IC MMK-Finance LLC with regard to the Stock.

In the course of the investigation it was established that D. Sheinin was involved in similar actions, though to a lesser degree, with other securities.

The Stock market situation conducive to the implementation of the above-mentioned illegal scheme was created at the expense of IC MMK-Finance LLC which eventually caused direct and indirect losses to the company.

According to Federal Law No. 224-FZ dated 27 July 2010 ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, transactions with the Stock conducted by D. Sheinin across the accounts of I. Mulyavko and IC MMK-Finance LLC, which resulted in a substantial deviation in the Stock trading characteristics, are qualified as market manipulation.

The Bank of Russia will take relevant corrective measures regarding individuals involved in securities market manipulation, including measures aimed at improving the internal controls -of IC MMK-Finance LLC.

The Bank of Russia will submit the relevant investigation materials to the law enforcement authorities.

On established facts of securities market manipulation by A. Kh. Lyulinsky

11^th October 2017

The Bank of Russia established multiple and continuous facts of market manipulation, on MICEX, in 31 securities in the period from 18 March 2011 through 9 December 2016.

Mr Artem Kh. Lyulinsky in his capacity as PJSC AK BARS’s employee and being authorised by JSC Investment Company AK BARS Finans, acting pursuant to an agreement on the fiduciary management of this credit institution’s assets, simultaneously conducted transactions across the said organisations’ accounts and his own brokerage account held with one of the major professional securities market participants.

To execute the above transactions, the following arrangements were used. Mr Lyulinsky opened a buy or an unsecured sell position on certain securities. Within a short time, he placed an order witha hidden volume to close this position at a beneficial price. Following this, on behalf of the credit institution or its trustee, Mr Lyulinsky initiated transactions with the same securities in the direction which ensured a price level beneficial to him. Most of Mr Lyulinsky’s orders were fulfilled by orders he submitted on behalf of PJSC AK BARS or JSC Investment Company AK BARS Finans. In this way, Mr Lyulinsky had the opportunity to sell and buy the securities within several minutes, incurring profits in his own brokerage account.

This trading behaviour resulted in short-term substantial fluctuations in the prices of financial instruments, as well as significant deviations in their trading parameters, and allowed Mr Lyulinsky to gain dozens of millions of rubles in profits by having caused detriment to PJSC AK BARS in the amount equivalent to the profits.

The transactions in securities conducted by Mr Lyulinsky in the above period for his own account as well as on behalf of the credit institution and its trustee, which resulted in a substantial deviation in the securities trading parameteres, are qualified as market manipulation, and thus, constitute a breach of the prohibition set forth by Article 6, Section 2 of Federal Law No. 224-FZ dated 27 July 2010 ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’.

In accordance with the Criminal Code of the Russian Federation, the illegal profits earned in the above period from market manipulation with the said securities is classified as exceptionally large profits.

The Bank of Russia will take appropriate action regarding Mr Lyulinsky to prevent similar violations in the future..

The Bank of Russia will send the relevant investigation materials to the law enforcement authorities.

On established facts of Closed-end Annuity Fund Kolchuga managed by LLC UNIVER Management, Closed-end Mixed Fund Tekhnologia Rosta, Closed-end Equity Fund Universalnye Strategii, Closed-end Equity Fund Otraslevye Investitsii managed by CJSC Management Company EMERALD GROUP

27^th September 2017

The Bank of Russia detected multiple and lasting cases of manipulation, on MICEX, in the units of Closed-end Annuity Fund Kolchuga managed by LLC UNIVER Management, Closed-end Hybrid Fund Tekhnologia Rosta, Closed-end Equity Fund Universalnye Strategii, Closed-end Equity Fund Otraslevye Investitsii managed by CJSC Management Company EMERALD GROUP (further jointly referred to as the Units) between 4 July 2012 and 5 November 2015 (further referred to as the Period) by a number of LLC UNIVER Capital clients: LLC UNIVER Management, LLC Asset Management Agency Impuls, LLC Investment Company D C Capital, LLC Centrum Depository, LLC Custody Technology and LLC HeliosGroup (further referred to as the Clients).

Trading of the Units in the Period was irregular, with the proportion of cross trade between LLC UNIVER Capital and the Clients in the total trading amounts of each of the Units at 96.5-99%. This suggests the above individuals were shaping the Units’ prices in full measure.

The bidding practices between LLC UNIVER Capital and the Clients (the same for each financial instrument) bear testament to prior agreement.

The resulting transactions, aiming to sustain the appropriate Unit price and traded value, recognised as capital by several professional securities market participants (including LLC UNIVER Capital, LLC Centrum Depository and LLC Investment Company D C Capital) failed to result in any substantial profit (or often resulted in a loss). However, they secured the appropriate value of the respective entity’s investment.

Moreover, found were diverse and multiple interrelations between LLC UNIVER Capital, CJSC Management Company EMERALD GROUP Clients, CJSC Management Company EMERALD GROUP, their staff, founders and beneficiaries.

In this way, the investigation established facts suggesting prior agreement was in place between LLC UNIVER Capital and the Clients on the execution of Unit transactions, resulting in substantial deviation in price and traded value in the trading of the Units on MICEX in the Period. These actions are qualified as Unit market manipulation under Article 5, Section 1.5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal law).

Importantly, in the period the above transactions were being conducted, LLC UNIVER Capital was a market maker as regards trading of the Units. For this reason, its actions are covered by statutory exemptions as per Article 5, Section 3.3 of the Federal Law; their actions cannot therefore be recognised as market manipulation in and of itself.

The bidder’s behaviour in the course of transactions, consisting in the use of a market maker status for its own and its clients’ benefit, will be subject of a separate Bank of Russia investigation for compliance with fair trade practices.

Following the investigation, the Bank of Russia decided to revoke professional licences from LLC UNIVER Management and LLC Asset Management Agency Impuls (a professional securities market participant’s licence and investment / unit investment / non-governmental pension fund management licence respectively).

Furthermore, regulatory action is being considered against other individuals including executives who were involved in market manipulation.

On detecting facts of market manipulation for bonds of OAO MSP-72 (MSP-72 OJSC) and ZAO ZAKAZCHIK-L (ZAKAZCHIK-L CJSC)

20^th July 2017

The Bank of Russia has established the fact of market manipulation for bonds of GazpromKO4, ALROSA BO1, ALROSA BO2, Alpha BO-7, Alpha BO-9 and Bashneft07 (further referred to as the Bonds) during trading on PAO Moscow Exchange in 2014-2015.

Within the above period, numerous trades of similar nature were conducted between OAO MSP-72 and ZAO ZAKAZCHIK-L, suggesting market manipulation in as many as 22 bonds. The said trades were concluded against matching orders having similar parameters and made within less than 30 seconds time difference, whereby ZAO ZAKAZCHIK-L systematically incurred losses concluding the said transactions and OAO MSP-72 gained positive financial result.

At the date of the transactions, Mr Igor Ye. Vasilyev was holding the position of Director General of the both companies mentioned above and personally made bids across brokerage accounts of OAO MSP-72 and ZAO ZAKAZCHIK-L.

It was established that Mr Igor Ye. Vasilyev is related to the owners of ZAO ZAKAZCHIK-L, i.e. Mr Ye. Vasilyev (holding 50% of the share) and Ms L. Vasilyeva (holding 50% of the share).

Mr Igor Ye. Vasilyev could have conducted the above-mentioned transactions with intention of withdrawing funds from the brokerage account of ZAO ZAKAZCHIK-L or giving the appearance of losses incurred by ZAO ZAKAZCHIK-L during on-exchange trading transactions, which were ultimately aimed at reducing its tax base.

Mr Igor Ye. Vasilyev’s activities in managing trading accounts led to a substantial deviation in the price of the Bonds and are qualified as market manipulation in accordance with Article 5, Part 1.2 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On combating the misuse of insider Information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’. Along with that, the said activities are qualified as a breach of the prohibition set forth Article 6, Clause 2 of the said Federal Law.

The Bank of Russia has taken action to prevent a recurrence of similar violations in the future activities of the individuals involved in market manipulation. Reports on the operations of OAO MSP-72 and ZAO ZAKAZCHIK-L have been submitted to the Federal Tax Service.

On establishing facts of manipulation in the market for ordinary shares of PJSC GC Rollman during trading at PJSC Moscow Exchange

5^th July

The Bank of Russia established the fact of manipulation in the market for ordinary shares of PJSC GC Rollman (hereinafter, the ‘Shares’) during trading at PJSC Moscow Exchange over the period from 19 December 2012 to 20 May 2016.

During the inspection, the Bank of Russia found that the deals for the purpose of manipulation of the market of the Shares were conducted by two groups of persons that are clients of various professional securities market participants.

The first group included 7 individuals: Yuri V. Arkhangelsky, Fedor N. Burchikhin, Anton A. Vorobiev, Olga M. Vorobieva, Andrei A. Gusev, Denis I. Mariechkin, and Natalia A. Stavnichuk; and 2 legal entities: CJSC PG Edelveis and LLC KC Magistr affiliated with PJSC GC Rollman. The second group included one legal entity, LLC EUROFINANCE, and 10 individuals: Natalia A. Adylova, Yulia Y. Buchinskaya, Mikhail M. Voevodin, Aleksei G. Golikhin, Viktoria N. Degteva, Dmitri A. Romanov, Sergei Yu. Savuk, Nikita S. Sorokin, Dmitri V. Stremedlovsky, and Maksim A. Tolmachev.

During the specified period, deals conducted by the above persons accounted for over 90% of the total volume of the Shares trading. These persons conducted deals that led to significant deviations of the demand, supply, price and/or volume of trading in Shares for the most part with each other by prior agreement. These activities led to establishing an artificial market for the Shares and misinforming third parties with regard to their price. Thus, during the period in question, individuals and legal entities affiliated with PJSC GC Rollman were at least one of the parties to 63% of on-exchange trading with the Shares.

The appearance of an active market for the Shares allowed CJSC PG Edelveis affiliated with PJSC GC Rollman to sell a part of the issue of the Shares to various individuals, and also to use the Shares as collateral under loan agreements.

It should be noted that a number of deals with Shares made between N.A. Stavnichuk and F.N Burchikhin had a market-maker status and were recognised by the exchange as deals conducted by a professional securities market participant performing its obligations under a respective agreement. However, the actions of these persons are not subject to exceptions stipulated in Clauses 1 and 3 of Part 3 of Article 5 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the ‘Federal Law’). N.A. Stavnichuk and F.N Burchikhin, being clients of a professional securities market participant, were not a party to a market maker agreement and their activities could not be aimed at supporting the price of the Shares under such an agreement.

The activities of the persons included in both groups constitute manipulation of the market for the Shares in accordance with Clauses 2 and 6 of Part 1 of Article 5 of the Federal Law.

The measures, including those prescribed by the Code of Administrative Offences of the Russian Federation, were taken against the persons who participated in manipulating the market for the Shares.

On establishing the fact of securities market manipulation by a group of individuals

20^th December

The Bank of Russia has established the fact of manipulation of the market for 8 securities traded on ZAO FB MMVB (MICEX Stock Exchange, CJSC) over the period from 9 January 2013 to 2 July 2015. Market manipulation, orchestrated by Yuriy D. Khilov, was committed by a group of persons comprising Natalia I. Khilova, Igor A. Novikov and Tatiana V. Novikova. The actions taken by the above persons resulted in receiving inordinately high income by the said individuals.

The investigation to establish the fact of the above market manipulation was conducted by the Bank of Russia with the kindest assistance from the German financial market regulator Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin) under the IOSCO Multilateral Memorandum of Understanding (IOSCO MMoU).

During the course of its investigation the Bank of Russia established that Yuriy Dmitrievich Khilov, as an authorized officer of OOO Deutsche Bank (Deutsche Bank Ltd), was conducting trades across the accounts of Deutsche Bank London Branch (OOO Deutsche Bank’s client) in collusion with his relatives Natalia I. Khilova, Igor A. Novikov and Tatiana V. Novikova. Consequently, Natalia I. Khilova, Igor A. Novikov and Tatiana V. Novikova gained a positive financial result thereby causing detriment of similar amount to Deutsche Bank London Branch. That said, most of the above trades resulted in a significant deviation of the relevant securities trading parameters.

The following trading mechanism was used when concluding the trades. An individual (Khilova N.I., Novikov I.A., Novikova T.V.) bought or sold a block of securities (generally using funds borrowed from brokers), while he/she placed an order to purchase/sell back an equivalent amount of securities shortly afterwards. During periods of trading activity performed by the above individuals, Khilov Yu.D. was concluding trades on behalf of Deutsche Bank London Branch in the same securities, in the direction ensuring a favourable price level for the said individuals. Moreover, the orders to buy/sell back the securities were fully or partially filled by the orders Yu.D. Khilov was placing on behalf of Deutsche Bank London Branch. Therefore, the said individuals had several minutes to buy and sell the securities, thereby achieving a positive financial result.

Pursuant to Article 5, Section 1.5 of Federal Law No. 224-FZ ‘On Combating the Misuse of Insider Information and Market Manipulation (Market Abuse) and on Amendments to Certain Legislative Acts of the Russian Federation’, collusive actions performed by Khilov Yu.D., Khilova N.I., Novikov I.A. and Novikova T.V. over the period from 9 January 2013 to 2 July 2015, which resulted in a significant deviation of securities trading parameters, are qualified as market manipulation.

The above actions, circumventing the requirements and procedures established by OOO Deutsche Bank, were performed by Khilov Yu.D. for a continuous period of time.

The Bank of Russia will take appropriate measures prescribing Khilov Yu.D., Khilova N.I., Novikov I.A. and Novikova T.V. to refrain from any further violations similar to those indicated herein.

According to the Criminal Code of the Russian Federation, the amount of illicit income derived from securities market manipulation by the above individuals over the relevant period is qualified as inordinately high income.

The Bank of Russia has sent relevant documents pertaining to the investigation to the law enforcement authorities of the Russian Federation.

On establishing fact of market manipulation with ordinary shares of public joint-stock company National Development Company

16 ^thNovember

The Bank of Russia has established the fact of market manipulation in ordinary shares of PJSC National Development Company (hereinafter, the Shares) during trading on PJSC Saint Petersburg Exchange (hereinafter, the Exchange) from 23 March 2015 through 22 June 2016 (hereinafter, the Period).

JSC IC Eltra clients O. A. Zhukovskaya and R. O. Tarasova conducted matching transactions in the Shares during anonymous trading sessions over the Period. The nature and systematicity of these transactions bear the evidence of a prearranged agreement.

Transactions across the accounts held by the said individuals created the whole Share market on the Exchange within the Period: they accounted for 99% of the total transactions in the Shares and total Share trading volume with virtually no other Share market participants present. The transactions executed between O. A. Zhukovskaya and R. O. Tarasova resulted in substantial deviation in price and/or volume of the Share trading.

JSC IC Eltra performed as a marketmaker for the Shares within the Period. The Bank of Russia revealed during the course of the investigation that the transactions across Tarasova’s and Zhukovskaya’s accounts were actually executed by JSC IC Eltra employee A. V. Okhremenko based on letters of attorney issued by the said individuals.

Actions undertaken by A. V. Okhremenko, who executed transactions from the two accounts, were aimed at establishing an artificial Share market value and misleading a wide range of individuals and the regulator as regards the Share market liquidity and activity. Besides, during the Period, the Shares were registered as part of assets held by several insurance companies.

Pursuant to Article 5, Section 1.5 of Federal Law No. 224-FZ ‘On Combating the Misuse of Insider Information and Market Manipulation (Market Abuse) and on Amendments to Certain Legislative Acts of the Russian Federation’ (hereinafter, the Federal Law), prearranged actions executed by JSC IC Eltra employee A. V. Okhremenko, O. A. Zhukovskaya and R. O. Tarasova are qualified as Share market manipulation. The said individuals violated the ban set forth under Article 6, Section 2 of the Federal Law.

It is important to note that since JSC IC Eltra clients who were not trading participants executed actions qualified by the Federal Law as market manipulation, they are not subject to seizures pursuant to Article 5, Section 3.3 of the Federal Law.

The Bank of Russia will initiate required enforcement actions against individuals involved in the Share market manipulation.

Earlier, the Bank of Russia took a decision to revoke licences of a professional securities market participant to carry out broker and dealer activity issued to JSC IC Eltra and to cancel the qualification certificate of a financial market specialist issued to A. V. Okhremenko in view of the involvement in manipulating the share market of OJSC Zhivoy Office.

On establishing the fact of market manipulation in the shares of OAO Zhivoy Office (Zhivoy office, OJSC)

20^thOctober

The Bank of Russia has established facts of market manipulation in the ordinary shares of OAO Zhivoy Office (Zhivoy office, OJSC; hereinafter the Shares) on ZAO MICEX Stock Exchange (MICEX SE, CJSC; hereinafter the Exchange) over the period from 13 January 2014 to 6 January 2015.

OAO Zhivoy office presented itself as a supplier of goods for “comfortable and bright” office work. OAO Zhivoy office arranged an active advertising campaign in the internet and print media, which encouraged institutional and private investors to invest their money in the ordinary shares of the company. According to the issuer, supplementary issue of the Shares was arranged to attract funds for further business development.

Supplementary Shares were offered to the public over the period from 3 July 2013 to 8 July 2013 in the ‘Innovation and investment market’ sector on the Exchange at the price 129 rubles per one Share, while net assets accounting per one Share was slightly above 1 ruble. A total of 4 000 000 Shares (comprising 33% of OAO Zhivoy Office enlarged share capital) were underwritten for the amount over half a billion rubles. Major purchasers of the Shares during their underwriting were companies interconnected with OAO Zhivoy Office: OOO Priboy (Priboy, LLC), OOO Modern (Modern, LLC) and OOO Vershina (Vershina, LLC).

The said legal entities acquired the Shares using borrowed funds which they received from an offshore company. OAO Zhivoy Office paid back the loan within one day through the interconnected entities. Thus, the underwriting of the Shares did not result in attracting real money despite of the issuer’s official announcement.

The Bank of Russia, in the course of its investigation, established that the trades qualified as Share market manipulation, were executed by two group of entities connected to OAO Zhivoy Office. Seventeen individuals and one entity, all of which were clients of various professional securities market participants comprised the first group (hereinafter Group 1). The Second group was comprised of three legal entities that acquired the Shares during their underwriting, and one individual (an employee of OOO Spens (Spens, LLC) which is a subsidiary of OAO Zhivoy Office), all of them being clients of AO investment company Eltra (investment company Eltra, JSC; hereinafter Group 2).

AO investment company Eltra was a market maker in the Shares. Along with that, trades in the Shares on the Exchange were executed solely by an authorized employee of AO investment company Eltra only across the accounts held by the entities comprising Group 2. The above mechanism was created by the top management of AO investment company Eltra and it was not suppressed by authorized persons of the above investment company. The Bank of Russia detected the trades qualified as non-market maker trades, and these trades were qualified as market manipulation in the Shares.

The above-mentioned entities executed trades, which resulted in substantial deviation of the demand, price and/or volume of the Shares, mainly with each other by prior agreement, inter alia with a view to creating artificial Share market and misleading other market participants regarding the Share price.

Thus, the entities connected to OAO Zhivoy Office were at least one of parties to 87% of the on-Exchange trades in the Shares over the relevant period, and 56% of the total Share trading volume were executed by these entities with each other.

Along with an artificial functioning of the Share market, a part of a supplementary issue was underwritten by a third party (a real investor).

OAO Zhivoy Office as well as interconnected legal entities and individuals were credited by commercial banks wherein the exchange-traded shares of OAO Zhivoy Office were acting as collateral. At present OOO Spens (Spens, LLC), one of the main subsidiaries of OAO Zhivoy Office, is under bankruptcy procedure. The issuer’s Board of Directors has taken a decision to hold an extra meeting of the shareholders, whereat one of the agenda issues raised will be OAO Zhivoy Office liquidation.

The actions undertaken by Group 1 and Group 2 as well as by AO investment company Eltra are qualified as market manipulation in the Shares pursuant to Article 5, Sections 1.2 and 1.6 of Federal Law No. 224-FZ ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’.

Based on the result of the investigation, the Bank of Russia has taken a decision to revoke licenses of professional securities market participants engaged in broker and dealer activity held by AO investment company Eltra as well as to cancel qualification certificates of professional securities market participants held by employees of AO investment company Eltra involved in market manipulation in the Shares. The Bank of Russia has taken measures, in relation to other entities involved in Share market manipulation, prescribing to refrain from any further activities similar to those indicated herein. The Bank of Russia has recommended the Exchange to consider delisting of the Shares.

On establishing facts of exchange-traded bonds market manipulation by LLC URALSIB Leasing Company at CJSC FB MOEX trading

30 ^th September

The Bank of Russia has established facts of exchange-traded bonds market manipulation by LLC URALSIB Leasing Company at CJSC FB MOEX trading from 24 February 2012 through 26 August 2015. These facts relate to the fifth, the tenth and the eleventh issues of bonds (hereinafter, the Bonds).

The examination revealed that within the time span stated clients of LLC URALSIB CAPITAL — Financial Services — LLC SPECTRON-CITY and JSC MC URALSIB which acted in the interests of trustors performed bond transactions by prior arrangement based on highly synchronised counter bids with identical quantity and price conditions which resulted in substantial deviations in bonds trading parameters.

One needs to mention in this connection that the said persons turned out to be extremely active in bonds trading. For example, JSC MC URALSIB and LLC SPECTRON-CITY accounted for over 86% of completed transactions with LLC URALSIB Leasing Company bonds of the tenth issue.

The examination also revealed that JSC MC URALSIB employee Alexey Yu. Markin functioned as LLC SPECTRON-CITY general director within the time span stated. Bids on behalf of LLC SPECTRON-CITY and JSC MC URALSIB Trustee were made directly by Alexey V. Korolenko, who functioned as a head of the board to manage JSC MC URALSIB bond funds.

The transactions were aimed at price formation and bond price and traded value maintenance.

Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and on Amending Certain Laws of the Russian Federation’ the actions performed by LLC SPECTRON-CITY and JSC MC URALSIB Trustee by preliminary agreement that resulted in substantial deviations in securities trading parameters fall under market manipulation.

Transactions which relate to bonds market manipulation were effected with a full connivance of Yury O. Belonoshchenko, who acted as JSC MC URALSIB general director.

The Bank of Russia has cancelled financial market specialist qualification certificates of Alexey V. Korolenko, Alexey Yu. Markin and Yury O. Belonoshchenko.

The Bank of Russia also cancelled financial market specialist qualification certificates issued to LLC URALSIB CAPITAL — Financial Services controller Tatyana N. Zizikova. In disregard for Russian legislation and duty regulations Tatyana N. Zizikova failed to timely identify and stop indecent behavior of LLC URALSIB CAPITAL — Financial Services clients although she did have opportunities to do so.

On establishing facts of securities market manipulation by group of individuals

30 ^th September

The transactions were aimed at price formation and bond price and traded value maintenance.

Transactions which relate to bonds market manipulation were effected with a full connivance of Yury O. Belonoshchenko, who acted as JSC MC URALSIB general director.

The Bank of Russia has cancelled financial market specialist qualification certificates of Alexey V. Korolenko, Alexey Yu. Markin and Yury O. Belonoshchenko.

On establishing facts of securities market manipulation by group of individuals

25^th August 2016

The Bank of Russia has detected the fact of market manipulation involving 37 securities on ZAO MICEX Stock Exchange (MICEX SE, CJSC) during the period from January 1, 2014 till August 25, 2015 by a group of individuals comprising Natalya N.Kornilova, Pavel M.Govorov, Mariya V.Smirnova, Andrey N.Kornilov whose actions were aimed at generating high excess income.

In the course of inspection the Bank of Russia has established that Andrey N.Kornilov, being an authorized employee at PAO BALTINVESTBANK credit institution, conducted, on its behalf, transactions in collusion with Natalya N.Kornilova, Pavel M.Govorov and Mariya V.Smirnova. As a result of these transactions, Natalya N.Kornilova, Pavel M.Govorov and Mariya V.Smirnova recorded a positive financial result by inflicting similar damage on the commercial bank. Such actions in most cases caused substantial deviations in the corresponding securities trading parameters. The inspection also detected multiple interconnections between Natalya N.Kornilova, Pavel M.Govorov, Mariya V.Smirnova and Andrey N Kornilov.

Transactions were carried out according to the following scheme. An individual (Natalya N.Kornilova, Pavel M.Govorov or Mariya V.Smirnova) opened a position by purchase or unsecured sale of securities and shortly afterwards submitted an order to close such position at a favourable price. Then Andrey N.Kornilov, acting on behalf of the credit institution, initiated trades in the same securities in the direction coinciding with the individual’s opening position. As a consequence, the securities’ price changed substantially, thus, increasing the individual’s financial result of the position size, and the position was closed at a profit. A position was closed, on average, 1-2 minutes after its opening. Natalya N.Kornilova, Pavel M.Govorov, Mariya V.Smirnova did not conduct any transactions under a different scheme during the period under consideration.

Pursuant to Article 5, Part 1, Paragraph 2 of Federal Law No. 224-FZ of 27 July 2010 ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’, colluded actions performed from January 1, 2014 through August 25, 2015 by Andrey N.Kornilov on behalf of the credit institution, as well as by Natalya N.Kornilova, Pavel M.Govorov and Mariya V.Smirnova, which resulted in substantial deviations in securities trading parameters, are qualified as market manipulation.

Individuals involved in market manipulation are held administratively liable by the Bank of Russia. The Bank of Russia has also revoked financial market qualification certificates issued to Andrey N.Kornilov.

In a separate series of such transactions which includes opening of a position by an individual and closing it out with a commercial organization involved, an individual recorded a financial result qualified as insignificant on a commercial scale. However, the aggregate income generated over the period in question as a result of securities market manipulation by a group of individuals, i.e. over 700 series of such transactions conducted within a long period of time, is classified as high in accordance with the Criminal Code of the Russian Federation.

The Bank of Russia will submit the inspection results to law enforcement authorities.

On establishing facts of market manipulation involving ordinary shares of PAO Uralskaya kuznitsa (Urals Stampings Plant PAO), PAO Chernogorneft (Public Joint Stock Company Cernogorneft; PJSC Chernogorneft), PAO Kovrovsky mekhanichesky zavod (Public Joint Stock Company “Kovrov Mechanical Plant”; PJSC “KMP”), PAO Saratovsky neftepererabatyvayushchy zavod (Public Joint Stock Company Saratov Oil Refinery; PJSC Saratov Oil Refinery), PAO Novorossiisky morskoy torgovy port (Public Joint Stock Company “Novorossiysk Commercial Sea Port; PJSC “NCSP”) and preferred shares of PAO Rossiiskiye seti (Public Joint Stock Company “ROSSETI”; PJSC “Rosseti”)

29^th July 2016

The Bank of Russia has detected the fact of multiple market manipulation on ZAO MICEX Stock Exchange (MICEX SE, CJSC) involving ordinary shares of Urals Stampings Plant PAO, PJSC Chernogorneft, PJSC “KMP”), PJSC Saratov Oil Refinery, PJSC “NCSP” and preferred shares of PJSC “Rosseti” (hereinafter jointly refereed to as the Shares) performed during the period from May 27, 2015 to September 2, 2015 (hereinafter the Period) by related persons: Yuri A. Zhilyayev and Alexander I. Zhilyayev.

An investigation conducted by the Bank of Russia has established that over the Period Yuri A.Zhilyayev conducted a series of transactions in collusion with Alexander I. Zhilyayev that led to substantial deviations in supply and demand, prices as well as trading volume of the Shares.

Trading in a number of Shares markets over the Period is irregular, the proportion of transactions conducted in collusion between Yuri A. Zhilyayev and Alexander I. Zhilyayev in the total trading volume of the above-mentioned instruments accounted for 82% to 100% on a number of days over the Period. Thus, on these days Yuri A. Zhilyayev and Alexander I. Zhilyayev fully controlled pricing of the above-mentioned shares.

Pursuant to Article 5, Part 1, Section 2 of Federal law No. 224-FZ of 27 July 2010 ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’ (hereinafter the Federal law), in the case under review, the undertaken activities can be qualified as manipulation in the Shares market. That said, Yuri A. Zhilyayev and Alexander I. Zhilyayev violated the prohibition set forth under Article 6, Part 2 of the Federal law.

The indicated individuals have been held administratively liable.

On detecting facts of market manipulation of the open joint-stock company Sofrinskiy Experimental Mechanical Plant (OAO SEMZ) ordinary shares

22^nd June 2016

The Bank of Russia has established the fact of continuously repeated market manipulation of the open joint-stock company Sofrinskiy Experimental Mechanical Plant (SEMZ, OJSC; OAO SEMZ) ordinary shares (hereinafter the Shares) by interconnected entities with a view to misleading a wide range of investors as regards price and liquidity of the Shares on ZAO MICEX SE (MICEX Stock Exchange, CJSC) from the end of 2011 to 2013.

During the said period, the trading activity of the Share market was maintained by the issuer itself, which is Decom limited liability company (Decom LLC; OOO Decom), a range of foreign legal entities, which are BLUBBERSTAR LIMITED, SKAVADOS ENTERPRISES LIMITED, Transcube Communications GmbH, Vionmane LTD, as well as natural persons — Skubak V.M. and Karmanov I.G. The Share trades between the entities mentioned above comprised more than 70% of the Share trading volume during the period indicated above and repeatedly amounted to 100% of the daily Share trading volume.

The investigation was conducted by the Bank of Russia with the kindest assistance of foreign financial market regulators: Cyprus Securities and Exchange Commission (CySEC) and Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin).

According to the result of the investigation conducted by the Bank of Russia, it has been established that the Share trades between BLUBBERSTAR LIMITED, SKAVADOS ENTERPRISES LIMITED, Transcube Communications GmbH, OAO SEMZ (SEMZ, OJSC), OOO Decom (Decom LLC) as well as between Skubak V.M., Karmanov I.G. and Vionmane LTD were conducted in collusion. The said trades resulted in substantial deviation in the price, volume, demand and supply of the Shares. Pursuant to Article 5, Section 1.2 of Federal law No. 224-FZ of 27 July 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation” (hereinafter Federal Law No. 224-FZ) these activities are qualified as market manipulation.

It should be noted that the Share trades between Skubak V.M., Karmanov I.G. and Vionmane LTD had the status of market making trades, and they were acknowledged by the exchange as the trades conducted while discharging obligations of a professional securities market participant under the relevant agreement. Along with that, exemption set forth in Article 5, Section 3.1 of Federal Law No. 224-FZ does not cover actions taken by Skubak V.M., Karmanov I.G. and Vionmane LTD. The said entities being the clients of professional securities market participants were not one of the parties of the agreement on discharging market making functions, and their actions could not be aimed at maintenance of the Share price within the frames of the agreement concerned.

OAO SEMZ (SEMZ, OJSC), OOO Decom (Decom LLC), SKAVADOS ENTERPRISES LIMITED, BLUBBERSTAR LIMITED subsequently placed buy orders at the highest price when conducting trades in the Shares, inter alia, with other securities market participants, thereby enabling Share price increase. The said trades were aimed at misleading other participants as regards the Share price, which resulted in its substantial deviation. Pursuant to Article 5, Section 1.6 of Federal law No. 224-FZ, the said actions are qualified as market manipulation.

The said manipulation resulted in framing artificial level of demand, supply, price and trading volume of the Shares.

The Bank of Russia has taken relevant measures regarding the entities involved in the Share market manipulation aimed at refraining from any further violations similar to those indicated herein.

On detecting facts of market manipulation of investment units of real estate closed investment unit fund Avex Real Estate (real estate ZPIF Avex Real Estate) managed by INTERCOMMERZ Asset Management on ZAO MICEX SE (MICEX Stock Exchange, CJSC)

2^nd June 2016

The Bank of Russia has established the fact of market manipulation of investment units of real estate closed investment unit fund Avex Real Estate (real estate ZPIF Avex Real Estate; hereinafter Investment Units) managed by INTERCOMMERZ Asset Management, CJSC (ZAO INTERCOMMERZ Asset Management) on ZAO MICEX SE (MICEX Stock Exchange, CJSC) during the period from 29 October 2014 to 1 April 2015 (hereinafter the Period).

During the course of the investigation, it was established that Investment Unit trading activity over the Period was fully achieved by the fact that trades had been conducted in collusion between the following interconnected entities: Gusev A.A., Maryechkin D.I., Mikhailov D.A., Guseva I.I., Boyko Yu.I., Kharitonov S.B., Kharitonov D.E., Kudryavtsev E.P. and OAO SMART Broker (SMART Broker, OJSC).

The said entities have launched a scheme of multiple resale to each other of a limited number of Investment Units, which enabled to assume false Investment Unit market activity as well as create conditions relevant for ZAO MICEX SE (MICEX Stock Exchange, CJSC) to determine market price.

Along with that, Investment Unit trades were conducted on the OTC market during the Period. Insurance market participants and professional securities market participants that could use market price determined by ZAO MICEX SE (MICEX Stock Exchange, CJSC) to comply with rules and regulations and other requirements of the Russian Federation legislation were the final purchasers in the said market. Moreover, an entity interconnected with INTERCOMMERZ Asset Management, CJSC (ZAO INTERCOMMERZ Asset Management) was the sole owner of the Investment Units when arranging the Fund.

The established interconnections of the securities market participants with INTERCOMMERZ Asset Management, CJSC (ZAO INTERCOMMERZ Asset Management) as well as allocated Investment Units within the entities supervised by the Bank of Russia indicate that the inclination to mislead investors and the Bank of Russia regarding the price and liquidity of the Investment Units as well as real economic situation of the above financial companies was one of the purposes to manipulate the Investment Unit market.

Pursuant to Article 5, Section 2 of Federal law No. 224-FZ of 27 July 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation” (hereinafter the Federal Law) collusive actions taken by Gusev A.A., Maryechkin D.I., Mikhailov D.A., Guseva I.I., Boyko Yu.I., Kharitonov S.B., Kharitonov D.E. and resulted in substantial deviation of the Investment Unit price are qualified as market manipulation.

Apart from that, pursuant to Article 5, Section 1.6 of the Federal Law, actions taken by Guseva I.I., Boyko Yu.I., Mikhailov D.A., Kharitonov D.E. for the purpose of misleading other entities in relation to the Investment Unit price and resulted in substantial deviation of the Investment Unit price are qualified as market manipulation.

Pursuant to Article 5, Section 1 of the Federal Law, investment Unit trades that did not result in substantial deviation of the Investment Unit trading parameters over the Period cannot be qualified as market manipulation, they are viewed, however, as an integral part of the series of trades conducted by interconnected entities in the course of subsequent artificial shaping of the Investment Unit market.

Market manipulation is a flagrant violation of the legislation of the Russian Federation.

The Bank of Russia has taken relevant measures regarding the entities involved in the Investment Unit market manipulation aimed at refraining from any further violations similar to those indicated herein.

On detecting facts of market manipulation of investment units of real estate closed investment unit fund Rodnie Prostory (real estate ZPIF Rodnie Prostory) and obligations of Rotor, LLC (OOO "OOO Rotor), Zhilstroy, STP, LLC (OOO STP)

17^th March 2016

The Bank of Russia has established the fact of market manipulation of investment units of real estate closed investment unit fund Rodnie Prostory (real estate ZPIF Rodnie Prostory; hereinafter the Fund, the Investment Units) managed by management company AK BARS CAPITAL, LLC (OOO UK AK BARS CAPITAL) and bonds of Rotor, LLC (OOO Rotor, 4-03-36052-R), Zhilstroy LLC (OOO Zhilstroy,) 4-02-36238-R), STP, LLC (OOO STP, 4-01-28061-R) (hereinafter together the Bonds) on ZAO MICEX SE (MICEX Stock Exchange, CJSC; hereinafter the Stock Exchange) during the period from January 2013 to April 2015. The trades were conducted by the following entities: Rotor, LLC (OOO Rotor), Zhilstroy LLC (OOO Zhilstroy), AVK, LLC (OOO AVK), Permtransmekhanizatsiya, LLC (OOO Permtransmechanizatsiya), TSK-1, LLC (OOO TSK-1), Rentek, LLC (OOO Rentek), Promaktiv, PJSC (PAO Promaktiv ), as well as by Romanova P.V. and Ivanov N.A.

During the course of the investigation, it was established that all the said entities including non-state pension fund Strategiya, JSC (AO NPF Strategiya) were interconnected and comprised the same group of legal entities, the Strategiya Group under control of several natural persons, final owners of the shares of the mentioned companies. The natural persons that took part in trading the Investment Units and the Bonds hold different positions in the Strategiya Group and are family- or professionally-related.

The character and mechanism of placing the orders to conduct trades in the Investment Units and the Shares on the Stock Exchange (often identical level of price and trading volume), the same trading participants, promoting the gradual increase in price of the Investment Units and the Bonds (the most evident tendency was observed in the end of the financial year 2013, 2014) indicate that the said entities acted in collusion.

The established interconnections of the said entities show that market manipulation of the Investment Units and the Bonds was particularly aimed to artificially increase the value of the assets being on the balance sheet of the AO NPF Strategiya and to enable to assume false prosperous activity and the profitability of the fund. The said actions were taken by the NPF Strategiya for the purpose of misleading investors and the regulator in relation to the price and liquidity of the Investment Units and the Bonds, thus achieving required reserves with the help of the management companies allocating pension funds and investing pension savings of NPF Strategiya into the Investment Units and the Bonds.

Pursuant to Article 5, Section 1.2 and 1.6 of Federal law No. 224-FZ of 27 July 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation” (hereinafter the Federal Law), collusive actions taken by Rotor, LLC (OOO Rotor), Zhilstroy LLC (OOO Zhilstroy), AVK, LLC (OOO AVK), TSK-1, LLC (OOO TSK-1 ), Permtrasmekhanizatsiya, LLC (OOO Permtransmechanizatsiya), Rentek, LLC (OOO Rentek), Promaktiv, PJSC (PAO Promaktiv), and by Romanova P.V. and Ivanov N.A. resulted in substantial deviation of the Investment Unit price, demand and supply as well as the Bond price, are qualified as market manipulation.

The relevant measures regarding the entities involved in market manipulation of the Investment Units and the Bonds have been taken including those in compliance with the requirements of the Administrative Code of the Russian Federation.

The Strategiya Group comprises, inter alia, management company Fraktal, LLC (OOO UK Fraktal) and management company Magistral, LLC (OOO UK Magistral) both managing pension funds and pension savings of AO NPF Strategiya. The actions of the management companies were not always caused by risk-oriented approach in choosing the trading strategy and investment items along with respecting genuine interests of the investors and participants of AO NPF Strategiya. Often the transactions were carried out without any economic expediency.

It appears that the said management companies acted mainly for the account and on behalf of the Strategiya Group and its beneficiaries while performing trust management of its funds.

On establishing the fact of market manipulation of units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya

11^th February 2016

The Bank of Russia has established the facts of continued and repeated manipulation of units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya traded on MICEX Stock Exchange CJSC in 2013-2014.

During the said period trading activities in the market of units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya were fully based on trades conducted in collusion by the following interconnected entities: Investment Company DC Capital LLC and UNIVER Capital LLC. During this period these entities conducted more than 70% of the trades in the units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya.

Univer Capital LLC and IC DC Capital LLC conducted repeatedly nonstandard trades for their account in the units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya, while placing alternate orders to buy and sell units with a short time lag and their volume and prices coincided, which proves that the said entities acted in collusion. These trades were conducted to maintain the market value of the units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya and create the illusion of activities in the unit market. The said units were used by a limited number of entities, in particular, by financial institutions, in order to intentionally misrepresent financial statements.

It should be noted that, while conducting the above trades, UNIVER Capital LLC acted as a market-maker in the unit market, thus, its activities are covered by the provisions of Article 5 Section 3.3 of Federal Law No. 224-FZ dated July 24, 2010, ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’ (hereinafter referred to as ‘the Federal Law’).

However, pursuant to Article 5 Section 2.1 of the Federal Law, activities performed by IC DC Capital LLC during the said period which were aimed at conducting trades in the units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya and resulted in substantial deviation in the price and/or volume of trades in the units may be qualified as market manipulation.

Market manipulation is a flagrant violation of the Russian Federation legislation.

The Bank of Russia has made a decision to revoke the license of a securities market professional participant in dealer activity issued to IC DC Capital LLC.

Financial market qualification certificates issued to IC DC Capital LLC officials involved as securities market professional participants in trades qualified as market manipulation of units of Closed-End Rental Unit Investment Fund Zemli Podmoskovya have been revoked.

On establishing facts of OJSC Lenenergo equity market manipulation

17^th December 2015

The Bank of Russia established facts of repeated and lengthy manipulation of the markets of ordinary and preference shares of OJSC Lenenergo (hereinafter, the Equity) at the trading of CJSC MICEX SE from September 2013 till June 2015.

The Bank of Russia’s inspection revealed that during this period CJSC IC Energocapital made a series of transactions by prior arrangement with its customer ONPER TRADING LIMITED. CJSC IC Energocapital used the customer’s trading account in its interests, which resulted in considerable deviations in the volumes of Equity trading, as well as demand and supply.

During this period, ONPER TRADING LIMITED and CJSC IC Energocapital systematically made a series of transactions within a short time span, which made a considerable share of daily Equity trading volume. These entities made bids simultaneously or within the seconds span. With rare exception, such deals resulted in the unchanged daily net-position of ONPER TRADING LIMITED in both equity and monetary terms. CJSC IC Energocapital and ONPER TRADING LIMITED were the key counterparties in the Equity market.

The inspection revealed that ONPER TRADING LIMITED and CJSC IC Energocapital with rare exception made deals in the Equity markets through offsetting orders placed by an authorised representative of CJSC IC Energocapital. In exceptional cases such offsetting orders were placed by two employees of CJSC IC Energocapital. These employees of CJSC IC Energocapital had the powers of attorney authorising them, among other things, to make any securities transactions on behalf of ONPER TRADING LIMITED without its prior agreement.

CJSC IC Energocapital had financial interest in achieving certain volume of trading in the OJSC Lenenergo equity markets, notably receiving a fee from its customer Energocapital-Consult LLC, the agent of the Equity issuer, under the relevant agreement in compliance with which one of parameters envisaged by the agreement was the achievement of certain monthly turnover in each OJSC Lenenergo equity market.

During the period under review, CJSC IC Energocapital was a market maker in the Equity markets. At the same time, CJSC IC Energocapital made equity transactions where ONPER TRADING LIMITED was a counterparty, on the basis of bids placed not within the contractual obligations of CJSC IC Energocapital as a market maker stipulated by the agreement with the Exchange.

Transactions between ONPER TRADING LIMITED and CJSC IC Energocapital made by the employees of CJSC IC Energocapital which resulted in considerable deviations in Equity trading volumes and supply and demand are considered as market manipulation in compliance with Clauses 2 and 4 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’.

Thereby, the employees of CJSC IC Energocapital manipulated OJSC Lenenergo equity markets in the interests of CJSC IC Energocapital using the trading account of its customer ONPER TRADING LIMITED who had authorised CJSC IC Energocapital and its employees to make securities transactions on its behalf.

Market manipulation is a gross violation of the Russian legislation and a violation of professional conduct of financial market participants.

The Bank of Russia cancelled licences of professional securities market participant issued to CJSC IC Energocapital.

Administrative measures will be considered with regard to CJSC IC Energocapital and its officials involved in transactions made by the professional securities market participant, which resulted in Equity market manipulation.

The relevant inspection materials will be submitted to the law enforcement bodies.

On establishing fact of investment unit market abuse

10^th December 2015

The Bank of Russia established a fact of repeated and continuous abuse of the market of investment units of Rozhdestvensky, closed-end real estate unit investment fund (real estate CUIF), during the trading on CJSC MICEX SE in 2012-2014.

The trading activity in the market of investment units of Rozhdestvensky, real estate CUIF, during the period under consideration was fully maintained by deals made under prior agreement between the following interconnected entities: IC Talan LLC, Deal-tag LLC, Dmitry Solntsev, Romix LLC, Thayctel LTD, Technostroy LLC and CJSC Energoinvest.

IC Talan LLC, Dmitry Solntsev, Deal-tag LLC, Technostroy LLC, CJSC Energoinvest and Romix LLC made deals aimed at increasing the market value of investment units of Rozhdestvensky, real estate CUIF. As the investment unit reached its maximum value during the trading, Technostroy LLC and CJSC Energoinvest purchased the investment unit of Rozhdestvensky, real estate CUIF, from Thayctel LTD, a non-resident company registered in the Republic of Cyprus. Afterwards, IC Talan LLC, Dmitry Solntsev, Deal-tag LLC, Technostroy LLC, CJSC Energoinvest and Romix LLC made deals aimed at bringing the market price of the investment unit down. As the market price of the investment unit of Rozhdestvensky, real estate CUIF, fell to the level of the imputed value of the investment unit, Thayctel LTD made reverse transactions to purchase investment units from Technostroy LLC, CJSC Energoinvest and other trading participants.

Thereby, deals with investment units were repeatedly made during the trading on CJSC MICEX SE as a result of which Thayctel LTD systematically gained income, while Technostroy LLC, CJSC Energoinvest, Romix LLC and IC Talan LLC suffered losses, and the actions of IC Talan LLC, CJSC Energoinvest, Technostroy LLC, Deal-tag LLC, Romix LLC and Thayctel LTD in the market of investment units of Rozhdestvensky, real estate CUIF, were aimed at creating favourable and appropriate conditions for systematic transfer of funds into a foreign jurisdiction.

Deals with investment units of Rozhdestvensky, real estate CUIF, made by the said persons during the period under consideration resulted in considerable deviation in price and/or trading volume of these investment units, and considered to be market abuse pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation and the Related Regulations’.

Market abuse is a gross violation of the Russian legislation.

The Bank of Russia decided to cancel the licence of professional securities market participant to carry out dealer activity of IC Talan LLC.

Bank of Russia cancelled qualification certificates of financial market specialists of the officials of IC Talan LLC involved in deals made by professional securities market participants which resulted in the abuse of market of Rozhdestvensky, real estate CUIF.

The Bank of Russia sent the persons who had manipulated the market of Rozhdestvensky, real estate CUIF, instructions on non-admission of similar violations in future.

On establishing the fact of market manipulation with units of closed-end unit investment hedge fund Altair and closed-end unit investment hedge fund Iskona

4^th December 2015

The Bank of Russia has established the facts of continued and repeated manipulation with the market for investment units of the closed-end unit investment hedge fund Altair and the closed-end unit investment hedge fund Iskona managed by AMC GPI, limited liability company (hereinafter, the Funds), at auctions held by MICEX Stock Exchange, closed joint-stock company, in 2011 to 2013.

Trading activities in the markets of the aforementioned units were maintained through pre-agreed transactions by a group of interconnected entities: HFL Finance LLC, Eco-Engineering LLC, JSCB FINPROMBANK PJSC, Palreco Ltd, and UM Finance Ltd, also having links with issuers of bonds, which had made up the Funds’ property, i.e., Ecolive Ltd and Yorkland Holdings Ltd, and with the persons who had invested these bonds in the Funds’ property.

The volume of pre-agreed transactions between these entities amounted to over 95% of total trades in units of the closed-end unit investment hedge fund Altair and 82% of total trades in units of the closed-end unit investment hedge fund Iskona in the period under review.

Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the transactions conducted by the aforementioned entities in the period under review with units of the hedge funds Altair and Iskona, which caused substantial deviations in prices and/or trade volumes of the said units, may be qualified as market manipulation.

The Bank of Russia has established that JSCB FINPROMBANK PJSC made long-term investments in the Funds’ units and over a long period of time kept their records at a value based on the results of transactions with the Funds’ units at auctions held by MICEX Stock Exchange CJSC, without making loss provisions.

The facts revealed and the procedure for and the quality of assessing the Funds’ property indicate that the latter were set up in the interests of beneficiaries from the scheme of establishing unit markets not related to investing in Ecolive Ltd and Yorkland Holdings Ltd.

Market manipulation is a flagrant violation of the Russian Federation legislation.

Persons involved in the transactions by HFL Finance LLC and UM Finance Ltd, which resulted in market manipulation with the Funds’ units, had their qualification certificates of financial market specialists cancelled.

The Bank of Russia also forwarded to persons involved in market manipulation instructions to prevent similar violations in the future.

On establishing fact of investment unit market abuse

13^th August 2015

The Bank of Russia established a fact of repeated and continuous abuse of the markets of investment units of Centre, closed-end rent unit investment fund (rent CUIF), and Malakhit, rent CUIF, during the trading on CJSC MICEX SE in 2012-2014, and the market of investment units of Strazhi Urala, real estate CUIF, during the trading on CJSC MICEX SE in 2012-2013.

The trading activity in the markets of investment units of Centre, rent CUIF, and Malakhit, rent CUIF, during the period under consideration was fully maintained by the following interconnected entities: CB Koltso Urala LLC, Regional AVK LLC, REA Delovoy Dom LLC, Solutions and Investments LLC and CJSC Uralleasing, also connected with the management company of the said funds MC Sodruzhestvo LLC. They bargained by prior agreement.

Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Counteracting Illegitimate Use of Insider Information and Market Abuse and Amending Certain Laws of the Russian Federation’ (hereinafter, Federal Law No. 224-FZ), deals executed by the said entities with investment units of Centre, rent CUIF, and Malakhit, rent CUIF, during the period under consideration which resulted in considerable deviation of price and/or volume of trading of these investment units are considered to be market abuse.

Besides, some deals with investment units of Centre, rent CUIF, and Malakhit, rent CUIF, repeatedly made by the said entities on certain trading days of the period under consideration which resulted in considerable deviation in price of these investment units, are considered to be market abuse pursuant to Clause 6 of Part 1 of Article 5 of Federal Law No. 224-FZ.

The trading activity in the market of investment units of Strazhi Urala, real estate CUIF, during the period under consideration was fully maintained by the following interconnected participants: CB Koltso Urala LLC, CJSC Management Company United Investment Funds, UGMK-Strakhovanie, and Oleg Pelikh, also connected with the management company of the said funds MC Sodruzhestvo LLC. They bargained by prior agreement.

Some deals with investment units of Strazhi Urala, real estate CUIF made by CB Koltso Urala LLC, CJSC Management Company United Investment Funds, UGMK-Strakhovanie, and O.A. Pelikh during the period under consideration resulted in considerable deviation in price of these investment units, and considered to be market abuse pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ.

Market abuse is a gross violation of the Russian legislation.

It should be noted, that Centre, rent CUIF, and Malakhit, rent CUIF, terminated their activity shortly after the MC Sodruzhestvo LLC received Bank of Russia instructions to provide documents regarding trust management of these funds.

The Bank of Russia took a decision to cancel licence to carry out professional activity in the securities market of CJSC Management Company United Investment Funds.

Bank of Russia cancelled qualification certificates of financial market specialists of the officials involved in deals made by professional securities market participants which resulted in the abuse of markets of the said investment units.

Administrative measures were applied to some officials involved in the abuse of markets of the said investment units.

The Bank of Russia sent the persons who had manipulated the markets of the said investment units, instructions on non-admission of similar violations in future.

On establishing facts of Mechel OAO common stock market manipulation

9^th July 2015

The Bank of Russia established facts of repeated market manipulation with regard to trades in Mechel OAO common stock on the Moscow Exchange.

In the course of its examination the Bank of Russia found out that on 13 November 2013 and 28 February 2014 Mechel OAO common stock prices significantly dropped during the trading sessions on the Moscow Exchange as a result of concurrent large calls for sale. On 13 November 2013, several traders offered more than 14.5 million shares for sale, and on 28 February, the offer exceeded 18.5 million shares, making 59% and 43% of the total stock trade on the indicated dates respectively.

Non-standard offers for stock sale were initiated by 8 Russian professional players, and also by 10 foreign brokers (investment companies trading at their customers’ instructions). Meanwhile, due to interaction with foreign counterparts and due to information provided by the Cyprus Securities and Exchange Commission, the Bank of Russia learned that all the non-standard offers were made in the interest of one entity, i.e. UFS Investments Ltd with the involvement of UFS CAPITAL LIMITED, a foreign broker company.

Over the same period of time, UFS Investments Ltd and UFS CAPITAL LIMITED sold depositary receipts on the common stock of Mechel OAO on the New York Stock Exchange (NYSE).

Acting on behalf of UFS Investments Ltd, UFS CAPITAL LIMITED struck deals to sell shares on the basis of offers with the lowest selling prices, after which during subsequent trading days reverse deals were made on behalf of UFS Investments Ltd.

It was also established that on 14 November 2013, UFS Investments Ltd made deals with shares during the trading session on the Moscow Exchange, and that the obligations of the parties to these deals were performed on account and for one and the same entity — UFS Investments Ltd.

According to Clauses 3 and 5 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Illegitimate Use of Insider Information and Market Manipulation and on Amending Certain Laws of the Russian Federation’ activities conducted by UFS Investments Ltd and UFS CAPITAL LIMITED are qualified as stock market manipulation.

The facts of stock market manipulation became possible because of improper discharge by the foreign depository (custodian) UFS CAPITAL LIMITED of its obligation to safekeep shares belonging to its legitimate owner. UFS CAPITAL LIMITED disposed of the shares at its discretion, namely, without obtaining required instructions this company posted shares belonging to their legitimate owner to the custodian account of UFS Investments Ltd. After this, the shares were sold at organised trades.

The stock market manipulation was conducted with the involvement of a Russian professional securities market participant — IC Arbat Finance (the former name of the company was IC UFS Finance), which set up a confusing scheme for the accounting of stock rights. Market manipulation is a gross violation of the Russian legislation requirements, and also a breach of financial market participants’ professional ethics. Besides, IC Arbat Finance created obstacles to examinations, and submitted contradictory and misleading information to the Bank of Russia.

In the period from 25 September 2009 to 25 June 2015, the sole executive body of IC Arbat Finance was Elena V. Zheleznova, which is also the sole founder and managing director of UFS CAPITAL LIMITED, and a beneficial owner of UFS Investments Ltd, UFS CAPITAL LIMITED and IC Arbat Finance. The actions of E.V. Zheleznova directly led to stock market manipulation by UFS CAPITAL LIMITED and UFS Investments Ltd. Besides, on many occasions E.V. Zheleznova did not provide information requested by the Bank of Russia.

As a result of repeated and gross violations of the legislative requirments on countering the illegitimate use of insider information and market manipulation, and also Russian securities legislation, the Bank of Russia decided to cancel the qualification certificate of financial market specialist issued to E.V. Zheleznova and to cancel the licences of a professional securities market participant issued to IC Arbat Finance.

The Bank of Russia passed over information on the violations of the Russian laws and, possibly, of the laws of the Republic of Cyprus commited by UFS Investments Ltd and UFS CAPITAL LIMITED to the Cyprus Securities and Exchange Commission. The licences of the investment company UFS CAPITAL LIMITED had been canceled earlier by the said commission.

The Bank of Russia submitted information on actions constituting the stock market manipulation and bearing the evidence of criminal offence to the Investigative Committee of the Russian Federation for consideration and procedural decision making.

On establishing facts of market manipulation regarding shares of Rosneft JSC, OJSC Rostelecom, JSC RusHydro, Sberbank, Surgutneftegaz OJSC, Tatneft JSC, ОАО LUKOIL

29^th April 2015

The Bank of Russia has established facts of market manipulation with regard to ordinary shares of Rosneft JSC, ordinary and preference shares of OJSC Rostelecom, ordinary shares of JSC RusHydro, ordinary and preference shares of Sberbank, ordinary shares of Surgutneftegaz OJSC, ordinary shares of Tatneft JSC, ordinary shares of ОАО LUKOIL (hereinafter referred to as ‘Shares’) during the trading sessions on the Moscow Stock Exchange over the period from 1 February, 2012 to 1 October, 2013 by the following entities: Ursa Capital LLC, Transportny LLC, INRESBANK LLC in its own interests and by the clients of INRESBANK LLC — JSCB MOSOBLBANK OJSC, RIK LLC, RSD LLC, Finance Business Bank LLC and also by a client of another professional player Shepelev Evgeniy Lvovich.

During the course of examination were established facts that the above mentioned entities acted in collusion concluding deals with the Shares, which resulted in sufficient deviation of the trades volume and Shares demand and supply.

During some days the share of the agreed deals between Ursa Capital LLC, Transportny LLC, INRESBANK LLC, JSCB MOSOBLBANK OJSC, RIK LLC, RSD LLC, Finance Business Bank LLC comprised 20-67% in the volume of the Shares trading. Thus, manipulation resulted in creating artificial levels of the demand and supply of the Shares and the volume of the Share trades.

Pursuant to Article 5, Section 1.2 of Federal Law No. 224-FZ dated 27 July, 2010 ‘On Countering the Illegitimate Use of Insider Information and Market Manipulation (Market Abuse) and on Amendments to Certain Legislative Acts of the Russian Federation’ activities undertaken by Ursa Capital LLC, Transportny LLC, INRESBANK LLC, JSCB MOSOBLBANK OJSC, RIK LLC, RSD LLC, Finance Business Bank LLC, Shepelev Evgeniy Lvovivh acting in collusion, which resulted in sufficient deviation of the trades volume and the Shares demand and supply, are qualified as market manipulation (market abuse). The above activities are a flagrant violation of the laws applicable in the Russian Federation.

It should be noted that market manipulation of the Shares had been arranged by INRESBANK LLC, JSCB MOSOBLBANK OJSC and Finance Business Bank LLC in a period before the Bank of Russia took its decision about their financial recovery. Former majority shareholders of INRESBANK LLC, JSCB MOSOBLBANK OJSC and Finance Business Bank LLC were removed from being owners or managers of these organisations. In light of the above mentioned, the Bank of Russia will not apply administrative measures regarding the said credit institutions. Still the Bank of Russia cancelled qualification certificates of securities market specialists of the employees involved in the market manipulation. Such employees were dismissed from the posts they had taken in the stated credit institutions.

Licences authorizing professional activity in the securities market of other legal entities, involved in market manipulation with the Shares, were cancelled.

The Bank of Russia has also forwarded an order notifying the entities involved in the Shares market manipulation that they should avert similar violations in the future.

On ascertaining facts of manipulation of unit markets

16^th March

The Bank of Russia has ascertained the facts of repeated manipulation of unit markets of closed-end rental unit investment fund Istok managed by FORTIS-Invest Management company LLC, closed-end rental unit investment fund GBM-Alfa and closed-end rental unit investment fund GBM-Beta managed by GBM Capital LLC at the trading sessions of MICEX Stock Exchange CJSC in 2012 and 2013.

The unit markets of closed-end rental unit investment fund Istok, closed-end rental unit investment fund GBM-Alfa and closed-end rental unit investment fund GBM-Beta were created artificially practically in full. The prices and trading volumes of units of all the three funds at the trading sessions of MICEX Stock Exchange CJSC were formed by non-marketable methods and supported purposefully by legal entities affiliated with each other and with the management companies of units: ВРМ А LLC, CarTrade LLC, Land Investment Company LLC, Samokat LLC, ElectroSbyt LLC, Galant LLC. The overwhelming majority of transactions with the funds’ units on the exchange (over 90%) were made by these entities. Moreover, considerable shares in trading volumes of unit markets of closed-end rental unit investment fund GBM-Alfa and closed-end rental unit investment fund GBM-Beta were formed involving CB Miraf-Bank CJSC, which had made premeditated transactions with Samokat LLC and ElectroSbyt LLC.

In pursuance of Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the actions taken by ВРМ А LLC, CarTrade LLC, Land Investment Company LLC, Samokat LLC, ElectroSbyt LLC, Galant LLC, and CB Miraf-Bank CJSC under the preliminary agreement and which caused considerable deviations of prices and trading volumes, are qualified as market manipulation.

The actions to manipulate unit markets of closed-end rental unit investment fund Istok, closed-end rental unit investment fund GBM-Alfa and closed-end rental unit investment fund GBM-Beta were aimed at misleading a wide number of investors, as well аs the financial market regulator with regard to the price and liquidity of these units.

Based on Clause 5 of Part 1 of Article 14 Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the Bank of Russia sent instructions to prevent similar violations in the future to ВРМ А LLC, CarTrade LLC, Land Investment Company LLC, Samokat LLC, ElectroSbyt LLC, Galant LLC, and CB Miraf-Bank CJSC.

On establishing the fact of market manipulation with investment units of the closed-end real estate unit investment fund Montes Auri Mountain (ZPIFN Montes Auri Mountain)

19^th February 2015

The Bank of Russia has established the fact of continued and repeated manipulation with the market for investment units of ZPIFN Montes Auri Mountain (closed-end real estate unit investment fund Montes Auri Mountain) during the period from July 2011 to June 2014.

The market for investment units of ZPIFN Montes Auri Mountain was almost completely created artificially by a group of interconnected individuals, also having indirect links with OOO UK Montes Auri (Montes Auri LLC), the asset manager of ZPIFN Montes Auri Mountain. The vast majority of trades in investment units were executed on the ZAO MICEX SE (closed joint stock company MICEX Stock Exchange) by Denis Alekseevich Bredikhin, Dmitry Andreevich Yakovenko, Aleksander Sergeevich Pristupnitskiy, Sergey Vladimirovich Vikharev and Rinat Rimovich Battalov acting in collusion. The above persons were sustaining trading activities on the market for investment units and their quotations, while in some cases cross trades comprised up to 100% of the daily trading volume in investment units of ZPIFN Montes Auri Mountain.

The way bids were submitted for executing trades in investment units, the systematic nature of trades, the limited number of trading market participants, the apparent connection between counterparties, lack of economic rationale behind the trades for some of them indicate that the trades were executed by counterparties acting in collusion, and liquidity, as well as prices, trading volumes, demand for investment units and their supply were artificially maintained.

These activities were presumably undertaken with a view to misleading a large part of the investor community as regards the price and liquidity of the investment units of ZPIFN Montes Auri Mountain.

Pursuant to Article 5, Section 1.2 of Federal law No. 224-FZ of July 27, 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation”, the activities undertaken by D. A. Bredikhin, D. A. Yakovenko, S. V. Vikharev and R. R. Battalov acting in collusion, which resulted in substantial movements in the prices, supply and demand for investment units, may be qualified as market manipulation (market abuse). The above activities may be referred to as a flagrant violation of the laws applicable in the Russian Federation.

In accordance with Article 14, Section 1.5 of Federal law No. 224-FZ of July 27, 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation”, the Bank of Russia has issued an order to D. A. Bredikhin, D. A. Yakovenko, S. V. Vikharev and R. R. Battalov to refrain from such activity in the future.

The Bank of Russia is currently considering other enforcement measures to be imposed on individuals involved in market manipulation (market abuse).

On establishing the fact of market manipulations with investment units of the closed-end credit unit investment fund Rossiyskiy Kreditny Soyuz, ZPIFC RKS (Russian Credit Union)

12^th November 2014

The Bank of Russia has established the fact of continued and repeated manipulation of the market for investment units of the closed-end credit unit investment fund Rossiyskiy Kreditny Soyuz, ZPIFC RKS (Russian Credit Union) during the period from November 2011 to September 2013.

The market for investment units of ZPIFC RKS was almost completely created artificially by a group of interconnected legal entities and individuals, also having links with OOO MFOND (MFOND LLC), the asset manager of ZPIFC RKS. The vast majority of trades in investment units of ZPIFC RKS were executed on the ZAO MICEX SE (MICEX Stock Exchange, CJSC) by OAO MEZHTOPENERGOCOM Investment Company (Interregional Fuel & Energy Investment Company, OJSC), ZAO Kompaniya Portphelnykh Investitsiy (Portfolio Investment Company, CJSC), OAO Bank Narodny Credit (People’s Credit Bank, OJSC), and R. M. Mironov acting in collusion. The above entities were sustaining trading activities on the market for investment units of ZPIFC RKS and their quotations by executing collusive trades. In most cases, cross trades effected by the above entities during the trading period comprised up to 100% of the daily trading volume in investment units of ZPIFC RKS.

That said, it should be noted that on certain days, when executing trades, OAO MEZHTOPENERGOCOM Investment Company was both a party to the trades acting on its own behalf and a trading participant acting on behalf and for the account of its clients, ZAO Kompaniya Portphelnykh Investitsiy and OAO Bank Narodny Credit, in accordance with the brokerage agreements concluded with them.

In view of the interconnectedness among OAO MEZHTOPENERGOCOM Investment Company, ZAO Kompaniya Portphelnykh Investitsiy and OAO Bank Narodny Credit through a group of legal entities and private individuals, and in respect of the lack of trades in investment units of ZPIFC RKS executed by other entities/individuals on the MICEX Stock Exchange on such days, it has been established that OAO MEZHTOPENERGOCOM Investment Company was acting on behalf of its clients, ZAO Kompaniya Portphelnykh Investitsiy and OAO Bank Narodny Credit by prior arrangement.

Pursuant to Article 5, Section 1.2 of Federal law No. 224-FZ of July 27, 2010 “On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation”, the activities undertaken by OAO MEZHTOPENERGOCOM Investment Company, ZAO Kompaniya Portphelnykh Investitsiy, OAO Bank Narodny Credit and R. M. Mironov acting in collusion, which resulted in substantial movements in the prices and trading volume of investment units, may be qualified as market manipulation (market abuse).

Market abuse shall be construed as a flagrant violation of the laws applicable in the Russian Federation, in breach of the code of professional conduct for financial market participants.

The Bank of Russia has taken the decision to revoke the license authorizing professional activity in the securities market held by legal entities, professional securities market participants, manipulating the market for investment units of ZPIFC RKS.

Furthermore, certificates of qualification in financial markets held by the officials involved in the trades executed by professional securities market participants, which resulted in the manipulation of the market for investment units of ZPIFC RKS, have been cancelled.

On establishing the fact of insider trading with OPIN, JSC, shares

10^th July 2014

Being in informational exchange with foreign regulating authorities, in February 2012 the Bank of Russia established facts of misuse of insider information of Otkritiye investicii LtD (Opin LtD) and ONEXIM HOLDINGS LIMITED.

In February 2012 ONEXIM HOLDINGS LIMITED decided to prepare a mandatory offer of ordinary personal uncertificated shares purchase issued by Opin, JSC. Before the information was provided to Federal Financial Market Service of the Russian Federation in March 2012, it had a status of insider information both for Opin LtD and for ONEXIM HOLDINGS LIMITED.

Inspections conducted by the Bank of Russia revealed the fact of delivering the insider information about the planned offer to ARDELICA LTD by S.S. Gorskiy, who at that time was ONEXIM HOLDINGS LIMITED representative. In such a way S.S. Gorskiy violated item 2 part 1 article 5 of the Federal Law № 224-FZ dated 27^th July 2010 “On counteracting the Illegitimate Use of Insider Information and Market Manipulation and on Amendments to Certain Laws of the Russian Federation” (hereafter Law 224-FZ).

Using the insider information, ARDELICA LTD purchased in February 2012 Opin, JSC, shares in Moscow Exchange trades. The shares were stored up by FOESTA LIMITED, which interests were also represented by S.S. Gorskiy. The final beneficiary of the manipulations was ONEXIM HOLDINGS LIMITED. By conducting such manipulations, ARDELICA LTD, FOESTA LIMITED and ONEXIM HOLDINGS LIMITED violated item 1 part 1 article 6 of Law 224-FZ.

The transactions were likely aimed at profiting by ONEXIM HOLDINGS LIMITED from purchase of Opin, JSC, shares before its shareholders received the mandatory offer of a price without acquisition premium.

According to item 5 part 1 article 14 of Law 224-FZ the Bank of Russia sent improvement notices concerning prevention of such offences in future to ONEXIM HOLDINGS LIMITED, ARDELICA LTD, FOESTA LIMITED and to S.S. Gorskiy.

According to item 1 part 1 article 15 of Law 224-FZ, receiving of such improvement notices is subject to obligate disclosure.

We call your attention, that insider trading foresees criminal responsibility since August 2013. That’s why the Bank of Russia has no ground for sending inspections results to law-enforcement authorities for beginning a criminal investigation. Still, the facts described in this informational message, established by fulfilling the supervisory activities by the Bank of Russia and represented in the instructions, can be used for assessing business reputation of individuals and legal entities mentioned above.

On establishing the fact of market manipulations

28^th May 2014

The Bank of Russia established facts of multiple manipulations with ordinary shares issued by Joint Stock Company UK ORF and investment units issued by Interval mutual investment fund of mixed investments “Third reserve fund” trading in Moscow exchange in 2011 and 2012.

Inspections revised, that trades with shares and investment units of the companies were almost completely simulated. 96,78% of trade volume of ORF, JSC, shares was accomplished with Fineko, LLC, and its customers — individuals and legal entities, related to each other, by the issuer, the management company of “Third reserve fund” and by the securities market professional participant itself. 99,71% of trade volume of “Third reserve fund” investment units was accomplished with Fineko, LLC, and its customers.

The trading authority Fineko, LLC, conducted an agreement with the companies mentioned above on market-making services for their shares and investment units. According to the agreement, Fineko, LLC, and its 32 customers submitted bids for the shares and investment units. Russian legislation on the prevention of misuse of insider information and market manipulations doesn’t regard actions aimed at price, demand, supply and trade volume support conducted according to agreements with trading authority as market manipulations.

In this very case, transactions with ORF, JSC, shares and “Third reserve fund” investment units concluded with Fineko, LLC, acting in own best interests and for its customers benefit, amounted to 90.8% (ORF, JSC) and 99,6% (“Third reserve fund”).

Manipulations with shares and investment units were accomplished by Fineko, LLC, customers — Russian and foreign individuals and legal entities. Individuals took different positions in ORF, JSC, which was a managing company of the “Third reserve fund” and in Fineko, LLC, a securities market professional participant, which contributed to the manipulations. The companies controlled legal entities manipulating on the financial instruments market.

Hence, prices for financial instruments were formed on Moscow exchange trades in non-market ways, as well as other trade characteristics (volume, supply and demand) and supported by concerned parties related to each other. The Bank of Russia believes, that JSC UK ORF share prices and “Third reserve fund” investment units prices developed in the open market (official rates) are not fair and do not represent the true value of the financial instruments.

Market manipulations are a crude violation of Russian legislation. The Bank of Russia revoked license for securities market professional participant for broker activity from Fineko, LLC, and cancelled qualification certificates of securities market specialists by Yuminov O.V., Orlov I.V. and Yakovlev A.S., who took positions of Director General in JSC UK ORF, Director General in LLC Fineko and compliance officer in LLC Fineko.

On establishing the fact of market manipulations with War and peace Media Group, JSC, shares

13^th November 2013

The Bank of Russia’s Financial Market Service established the fact of repeated manipulating the market of the shares issued by War and Peace Media Group, JSC, at the Moscow Exchange trades in 2012.

Manipulating was accomplished by founders and by company officials.

The market of the War and Peace Media Group, JSC, shares was manipulated through intentional dissemination of false information and through transactions with its shares agreed before by participants benefiting from them. As a result of the manipulations market variables deviated from the level, that would remain without the transactions. Besides, during trading days in Moscow Exchange, multiple transactions for the benefit of one and the same individual based on bids with highest purchase price and lowest selling price were accomplished, resulting in price deviation from the level, that would be formed without such bids. The manipulations were aimed at benefiting from reverse transactions carried out by deviated prices.

Transactions describes above were carried out in great volume, had no economic purpose and were only aimed at imitating high demand for War and Peace Media Group, JSC, shares, in order to sell them to general public and increase trades activity.

Besides, the company official individual violated the Federal Law “On the prevention of misuse of insider information and market manipulations, with amendments to concerning legislative acts of the Russian Federation” in the items concerning the delivery of notices about transactions accomplished with the company’s shares.

The concerned War and Peace Media Group, JSC, official individual will be held administratively liable by the Bank of Russia’s Financial Market Service.

Inspections results will be sent to law-enforcement authorities for beginning a criminal investigation due to the fact, that involved individuals gained profit in an especially large amount. The Bank of Russia’s Financial Market Service will provide assistance to law-enforcement authorities in investigating the manipulations.

To prevent similar manipulations in future by the offenders, they were forbidden to accomplish any transactions with trading authorities including any operations with derivatives.

In addition, the Bank of Russia’s Financial Market Service sent to Moscow Exchange a letter on necessary measures to be taken for precautions and preventions of manipulations with War and Peace Media Group, JSC.

On establishing the fact of price manipulation with Biodinamika, JSC, shares

December 28, 2010

The Federal Financial Markets Service took a decision to acknowledge price manipulation with ordinary registered uncertified shares of Biodinamika, JSC, Donskaya Investment Company, JSC, Mezhotraslevaya Strahovaya Companiya, JSC, Polyot, JSC, and FinInvest, JSC.

This decision is taken according to the securities legislation and it is based on the results of the inspection carried out by the FFMS of Russia.

In the course of the inspection the Service found out that from 2008 to 2010 Donskaya Investment Company, JSC, and FinInvest, JSC, manipulated shares prices of Biodinamika, JSC, Donskaya Investment Company, JSC, Mezhotraslevaya Strahovaya Companiya, JSC, Polyot, JSC, and FinInvest, JSC, during trade sessions at the Moscow Stock Exchange and carried out repeated transactions with the above mentioned shares for the benefit of their clients CenterLeasing, JSC, and SK Expertno-Konsultativnoe Strakhovanie, LLC, without any obvious economic sense or legal purpose, and the fulfilment of liabilities under which did not change securities’ holders.

The inspection also found out that from 2008 to 2010 CenterLeasing, JSC, and SK Expertno-Konsultativnoe Strakhovanie, LLC, manipulated shares prices of Biodinamika, JSC, Donskaya Investment Company, JSC, Mezhotraslevaya Strahovaya Companiya, JSC, Polyot, JSC, and FinInvest, JSC, in the course of trade sessions at the Moscow Stock Exchange, as they issued orders to one or simultaneously two trading participants to carry out two or more transactions with the same security, and in the transactions the buyer and the seller acted for the benefit of the client.

As the result of the actions performed by Donskaya Investment Company, JSC, TradeFinance, LLC, Center Leasing, JSC, and SK Expertno-Konsultativnoe Strakhovanie, LLC, the prices on shares of Biodinamika, JSC, Donskaya Investment Company, JSC, Mezhotraslevaya Strahovaya Companiya, JSC, Polyot, JSC, and FinInvest, JSC, were maintained at a fixed level, and their trade volume was increased at the Moscow Stock Exchange, JSC.

Due to the acknowledgment of shares prices manipulation, the FFMS of Russia revoked the licenses to carry out broker, dealer activities, securities management and depository activities issued to securities market professional participant Donskaya Investment Company, JSC.

Earlier, on September 22, 2009, the FFMS of Russia revoked the licenses of the securities market professional participant TradeFinance, LLC, because of committed violations.

At present the Federal Financial Markets Service is going to send the inspection results to the law enforcement authority.

Unfair practices

On cross-trades

In the course of its monitoring of on-exchange trading of market participants, the Bank of Russia detects cross-trades which may be qualified as market abuse.

These cross-trades are conducted on the basis of orders made by an entity acting both as a seller and a buyer in a transaction conducted for its own account as a result of cross-orders being placed:

1) Through various participants (brokers, banks, etc.) by one entity with a different customer identification code registered with the exchange; or

2) Through one participant in the event the exchange authorises the said trading participant, upon its request, to conduct cross-trades.

In some cases, these trades are conducted via algorithmic trading systems operating on behalf of one and the same entity. This results from the fact that mechanisms preventing on-exchange trading transactions between various ‘strategies’ were not implemented in the relevant algorithms.

In this regard, the Bank of Russia finds it necessary to inform market participants as follows.

The trades, obligations under which are fulfilled for the account and on behalf of the same entity, may result in sufficient deviations of trading parameters. As a whole, they may be qualified as market manipulation pursuant to Article 5, Section 1.3 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ in the event the trades are conducted on the exchange on the basis of orders addressed to all participants and in the event information on entities which placed orders and on whose behalf the orders were placed is not disclosed to other participants.

The Bank of Russia recommends that market participants, when developing algorithmic trading systems, take into account the risks that arise out of the conducting of on-exchange cross-trades.

Participants, prior to filing an application with the exchange in order to receive an authorisation for their clients to conduct cross-trades, are recommended to consider whether this authorisation would be relevant and expedient. In the event the said authorisation is given to a client which is a foreign entity providing services to third parties in the financial market, the participant is recommended to consider whether it would be relevant for the exchange to register ‘second-layer’ clients to be able to discern clients on whose behalf trades are conducted.

Conducting transactions for the acquisition of the issuer’s shares through third party companies by using insider information relating to the launch of the mandatory public offer

The corporate shareholder (company) intended to purchase a controlling interest in the issuer’s shares traded on the exchange. As a result of the purchase, the said shareholder was subject to an obligation to make a public offer to the minority shareholders of the issuer. During the preparation of the mandatory offer, the shareholder, having provisionally set its terms and conditions, was purchasing the issuer’s shares on the exchange through its affiliated companies acting on its behalf. After that, the accumulated issuer’s shares were transferred from the custody accounts of the above affiliated companies to the custody accounts of the above corporate shareholder under over-the-counter share purchase agreements in place. That said, the company did not take any formal corporate actions relating to the acquisition of the issuer’s shares and terms and conditions of the mandatory offer during the purchase period.

The activities specified above were undertaken during the period following the corporate action issued by the company regarding the intended acquisition of a controlling interest in the shares and hence the launch of a mandatory offer subject to certain conditions but before the offer was actually forwarded to the regulator and the issuer, and before the disclosure of this information in line with the established procedure. The shares were purchased at a price lower than that being made available in the intended mandatory offer. As soon as the information relating to the launch of the mandatory offer by the corporate shareholder was disclosed to the regulator to give prior notification, the exchange saw an increase in the volume of the issuer’s shares traded, as well as higher prices for the shares. As soon as the information relating to the launch of the public offer, as well as its terms and conditions, were disclosed to the issuer, the issuer’s share price considerably declined reaching the level comparable to the mandatory offer price.

The company, by way of explanation for its actions, stated that it did not consider the information regarding the plans for acquiring a controlling interest in the issuer’s shares, and hence the preparation of the mandatory public offer, as insider information since it had failed to follow the formal corporate procedures for decision-making with regard to the issues specified. Moreover, according to the company, it was not subject to the requirement to maintain an insider list.

These practices are considered unfair by the Bank of Russia, in breach of the insider trading and market manipulation legislation. Failure to comply with any formal provisional rules and procedures established by legislation, binding on companies, as well as failure to adhere to internal corporate policies and procedures does not absolve such a company from liability for future insider trading violations.

The information concerning the person controlling the issuer (directly or indirectly through affiliated persons), as well as about the launch of a voluntary, mandatory or competitive offer for the acquisition of the issuer’s shares is insider information pertaining not only to the issuer but also to other persons having access to such information. That said, the information regarding the launch of a public offer is considered insider information from the moment its preparation starts and all the essential terms and conditions are tentatively set out by the shareholder. For instance, the time the shareholder files an application for a bank guarantee, which is binding in this case, may be considered such a moment. Persons having access to such information, as well as persons having launched the relevant offer are considered insiders.

The corporate shareholder should have implemented all the necessary measures to protect the said insider information and ensure that individuals designated by law having access to insider information are on the insider list. The corporate shareholder and its insiders with regard to the information relating to the launch of the public offer should have refrained from transactions in the issuer’s shares on the exchange under invariably preferential terms and conditions specifically set for them, as compared with the terms and conditions under the mandatory public offer prior to the disclosure of insider information about the launch of the public offer.

The corporate shareholder misused the insider information regarding the launch of the public offer with a view to conducting transactions to acquire the issuer’s shares through third party companies, as well as by passing on the insider information to these companies, which is expressly prohibited by law. The corporate shareholder engaged in illegal and unfair conduct in order to avoid losses stemming from an increase in the issuer’s share prices on the exchange, which may have occurred under the influence of the said information during the acquisition of the shares.

The corporate shareholder’s conduct has infringed the rights and legitimate interests of independent organized market players, i.e. investors that incurred losses due to the lack of information required to make correct, informed investment decisions with regard to the situation under review. The organized market players selling the issuer’s shares that did not have access to the relevant insider information prior to its official disclosure were invariably put at a disadvantage by the corporate shareholder and its related parties during this period given that they were selling the shares at a price lower than that being subsequently made available in the mandatory offer. Therefore, the market conditions for fair value pricing of the issuer’s shares were undermined.

Dissemination of Inaccurate Information Regarding the Intention to Launch a Public Offer for the Acquisition of Shares

The corporate shareholder’s representative disclosed, to the mass media, that as soon as the company purchases a controlling interest in the issuer’s shares, it intends to launch a public offer to the minority shareholders of the issuer for the acquisition of their shares.

The announcement resulted in an increase in the issuer’s share trading volume and a substantial rise in the share quotations on the exchange over an extended period of time. In accordance with the criteria established by the trading organizer (exchange), the deviation in the demand, trading volume and price for the issuer’s shares appeared material. However, the offer was not launched, which was caused by the difficulties faced by the corporate shareholder while trying to raise funds necessary for purchasing the shares under the offer. The corporate shareholder subsequently dismissed the idea of acquiring the issuer’s shares.

Pursuant to Article 5, Section 1.1 of Federal law No. 224-FZ of 27 July 2010 ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’, in the case under review, the activities undertaken by the corporate shareholder cannot be qualified as market manipulation involving the issuer’s shares since the corporate shareholder did not intentionally disclose any false or deceptive information in its announcement.

However, the above practices are qualified as unfair by the Bank of Russia since they fail to comply with the established code of business conduct and ethics in the financial market and may fringe the rights and legitimate interests of investors, financial market players.

The information disseminated through the announcement made by the corporate shareholder, by its nature and content, under certain conditions shall be qualified as insider information and disclosed in line with the established procedures. To this end, it is necessary to provisionally define and agree on all the material terms and conditions of the intended transaction for the acquisition of the issuer’s shares and obtain confirmation and guarantees most relevant to its execution (for example, with regard to the possibility and willingness to provide the required funding). Otherwise, as it happened in the above-mentioned instance, the information disseminated is inaccurate and untimely, unconfirmed or representing the expectations of someone who provided the information regarding the probability and desirability of certain circumstances.

The announcement made by the corporate shareholder contained information concerning its plans, intentions, expectations and assumptions with regard to acquiring a controlling interest in the issuer’s shares, the launch of a public offer to the minority shareholders of the issuer, receiving the required funding and obtaining a bank guarantee for the acquisition of the issuer’s shares. The information disseminated by the corporate shareholder’s representative was not definite, accurate and precise. Along with that, in the context of the announcement made it was perceived by the financial market participants as final and accurate. The dissemination and supply of such information by any means without relevant reservations are deemed unacceptable by the Bank of Russia from the perspective of fair practices.

The company’s official providing such information should take into account the increased sensitivity of the financial market to the disclosure of the said information, regardless of how accurate it is, and hence accept reasonable responsibility for the possible use of the said information by market participants. The dissemination or supply of such information may be misleading for them and materially affect the price and other parameters of a financial instrument, thereby distorting the market factors behind fair value pricing. The use of such information may inflict losses on investors.

When disseminating such information through the mass media and official sources, it is necessary to specifically emphasize that it is tentative and not final, while highlighting that it may possibly be revised and subsequently altered. Along with that, it is necessary to focus the market on the probability of the said events, among other things, depending on compliance with internal policies and procedures as required by law (for instance, approval of the transaction by relevant management bodies of the company; gaining consent for the transaction from the competition authority; issuing relevant notification). Treatment of such information as insider information and its subsequent gradual disclosure (progressively as the information is revised and altered), in accordance with the established rules and procedures, make it possible to fully and effectively protect the rights of all stakeholders.

If information disseminated in this manner fails to be in line with the real intents, proves inadequate, inaccurate, or incomplete, leaves room for ambiguous or incorrect interpretation by market participants, the relevant source of information shall immediately demand that the information is refuted, revised or amended (specified) in accordance with the established rules and procedures. Such revisions will enable other interested market participants to avoid inherently wrong investment decisions.

The facts of similar unfair practices will be taken into account by the Bank of Russia when assessing the business reputation of the persons involved in the said conduct. More rigorous controls will be imposed on transactions and other activities of the said persons in the financial market.

Effecting a Transaction on the Exchange with the Assistance of the Analytics Division of a Professional Securities Market Participant

The professional securities market participant intends to sell its securities or receives an order from its client, under the brokerage services agreement in place, for the sale of a large block of securities, the liquidity of which is not sufficient enough to ensure that the said order may be executed on the exchange by the desired dates. Attempts to sell such securities on the exchange in small quantities set a downward trend in the price of securities, and hence may result in a substantial decline in profits from any subsequent sales of the block of securities.

In this regard, the professional securities market participant seeks to find, to its own or the client’s benefit, a counterparty to the transaction by means of issuing and disseminating, to a wide range of market participants, an analytical report deliberately containing a positive assessment of securities and highlighting their investment attractiveness. This analytical report may be prepared and issued by the professional securities market participant interested in the transaction (its analytical division) on its own behalf; along with that, it may be commissioned by the said market participant (or its official) and issued by some other person not directly related to him that has no interest in the transaction, inter alia, by some other professional securities market participant on its own behalf. Thereafter, the professional securities market participant effects a transaction to sell the said block of securities for its own account and on its own behalf or on behalf of its client in collusion with the counterparty. Pursuant to Article 5, Section 1.2 of Federal law No. 224-FZ of 27 July 2010 ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’, collusive trades effected on the exchange resulting in a material deviation of market parameters of trading in securities (price, demand, supply and trading volume) shall be qualified as market manipulation.

In this particular case, the analytical report disseminated to a wide audience has been used by the professional securities market participant as a tool to influence potential buyers with a view to selling a large block of securities.

The above practices, i.e. the issue and dissemination of analytical reports by professional securities market participants with a view to artificially creating a favorable information background for the implementation of investment decisions in the financial market, are deemed unfair by the Bank of Russia, regardless of whether the decisions (transactions and trades) implemented in this manner result in a material deviation in the market parameters of a financial instrument or not. Conducting such collusive trades in the over-the-counter market by making use of deliberately false information, conclusions and recommendations contained in the analytical report is deemed as unfair practices by the Bank of Russia as well. Despite the fact that, to date, such conduct is not directly referred to as market manipulation under the Russian legislation, the given practices appear misleading to market participants and, essentially, represent one of the means to deliberately spread misinformation.

Along with that, according to international practices the above-mentioned series of actions taken by the professional securities market participant is defined as manipulative practices.

The professional securities market participant intended to sell a large block of securities under conditions that could not be secured by the market (lack of adequate demand for securities and hence low price level) and influence the market situation (by means of information resources). The professional securities market participant fulfilled the above intention, having artificially created the requisite situation in the market through stimulating the demand for securities by means of the analytical report with a view to generating profits.

In order to prevent similar unfair practices, it seems appropriate to introduce, among other things, a clear division and segregation of duties assigned to the investment and analytics divisions of professional securities market participants.

The facts of similar unfair practices will be taken into account by the Bank of Russia when assessing the business reputation of the persons involved in the said conduct. Along with that, more rigorous controls will be imposed by the Bank of Russia on transactions and other activities of the said persons in the financial market.

Possible Implications of the Materialization of Liquidity Risk in REPO Transactions

In response to the request submitted by the Issuer, the Bank of Russia has conducted an investigation into alleged market manipulation involving ordinary shares of the Issuer (hereinafter the Shares) traded on ZAO MICEX Stock Exchange (hereinafter the Exchange), which saw their share price decline over a few days by more than 50%.

During the course of the investigation the Bank of Russia established as follows.

The Issuer’s foreign subsidiary (hereinafter the Subsidiary) is a client of a foreign broker (hereinafter the Broker), which is a client of a Russian professional securities market participant, a trading participant on the Exchange. In order to raise the requisite funding, the Subsidiary entered into an over-the-counter REPO transaction in Shares with the Broker (hereinafter the Repo transaction) against the Issuer’s guarantee.

The Subsidiary failed to discharge its obligations to the Broker under the REPO transaction in a timely manner.

In accordance with the terms and conditions of the agreement with the Subsidiary, the Broker started to heavily sell low liquid Shares on the Exchange in the main trading mode, which caused the Share price to plummet.

The conduct of the parties does not constitute a breach of any prohibitions expressly set forth under Federal law No. 224-FZ of 27 July 2010 ‘On combating the misuse of insider information and market manipulation (market abuse) and on amendments to certain legislative acts of the Russian Federation’.

However, given that the conduct of the parties to the REPO transaction artificially caused a substantial change in the price of Shares traded on the Exchange, the Bank of Russia deems it necessary to draw market participants’ attention to the following.

Market participants should carry out a comprehensive risk assessment. Specifically, the volume of the REPO transaction concerned exceeded several hundred times the average daily trading volume of Shares. Such a volume does not allow for a possibility to quickly sell Shares on the Exchange in the main trading mode without materially affecting the price. The possible decline in the Share price was not adequately accounted for in the discount rate agreed on by the parties to the REPO transaction. The Bank of Russia considers that the Broker failed to take a balanced approach to risks. When carrying out a risk assessment, prior to entering into the REPO transaction, the Broker should have performed an analysis of the liquidity and capacity of the Share market.
The Broker having specialist knowledge of financial markets and the requisite infrastructure, prior to the sale of a large block of Shares, ignored the level of liquidity in the market, failed to take into account possible implications of the sale of Shares traded on the Exchange and did not consider any other options of the sale of a block of Shares.
The irresponsible conduct of the Subsidiary and the Broker could have inflicted potential losses on third parties, shareholders of the Issuer.
The Subsidiary is managed by the Issuer’s employees. The Issuer was aware that the second leg of the REPO transaction was entered into but failed to be executed in a timely manner by the Subsidiary, and that the Broker intends to sell Shares to pay off the Subsidiary’s debt. However, the Issuer failed to fully implement the appropriate measures to resolve the said conflict situation. In its request the Issuer withheld some facts and circumstances of the case, thereby misinforming the Bank of Russia and putting pressure on the Broker through the Bank of Russia.

The Bank of Russia proposes that market participants should be more responsible and carefully consider possible implications of their conduct. Situations related to the counterparties’ failure to discharge their obligations under over-the-counter transactions shall be resolved within the boundaries of the legal framework and should not materially affect the rights and interests of third parties.

Department responsible for publication: Financial Market Infrastructure Department

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