Measures to support financial market infrastructures in 2024: cancellation and temporary extension

The Bank of Russia has decided not to extend a number of easing measures for financial market infrastructures (FMIs)¹ scheduled to expire in 2023. The analysis of the practical application of the implemented easing measures shows that the Bank of Russia’s measures have generally smoothed the negative effect of the restrictions imposed by unfriendly countries and helped FMIs adjust to the new environment.

Therefore, the Bank of Russia intends to extend only those easing measures the underlying factors of which remain. The Bank of Russia will continue to incorporate into regulation temporary solutions factoring in the impact of blocked assets, lessons from crisis and the specific nature of the Russian financial market.

Measures to be cancelled:

• Non-application of enforcement measures against commodity trade organisers for failures to comply with:
• the requirement to notify the Bank of Russia of non-standard transactions (applications) pursuant to Federal Law No. 224-FZ,² dated 27 July 2010, through the Bank of Russia’s remote terminal when these notices are submitted through the online account (in relation to trading systems)³;
• the deadline for submitting information to the Bank of Russia about significant deviations in the trading parameters when this information is submitted no later than on the business day following the day when these deviations have been detected.
• Non-application of enforcement measures against depositories providing services for the record-keeping of rights to foreign issuer securities admitted to public offering and/or public trading in the Russian Federation if they fail to comply with the requirements for the period of depository activity.⁴
• Permission for specialised depositories to send a single notice to the Bank of Russia about a violation detected in a UIF MC’s activities that occurred because it was impossible for the UIF MC to calculate the UIF’s net asset value, which was the reason for the suspension of the issuance, redemption and exchange of investment units.
• Permission for depositories and securities holders’ registrars that are not credit institutions to gradually discount the value of blocked assets to calculate equity.⁵

Measures planned to be extended until 31 December 2024:

• The FMIs’ right not to disclose information sensitive to the sanctions risk (including as part of financial statements), including information on the FMIs’ ownership structure, the composition of their shareholders (participants), affiliated entities, members of governance bodies and other officers, as well as material conditions of their reorganisation. The similar approach will continue to apply to the disclosure of FMI reports and securities issuances on the Bank of Russia website.  
• The right of information system operators issuing digital financial assets and entities issuing digital financial assets not to disclose information on beneficiary owners of entities issuing digital financial assets which is sensitive to the sanctions risk.
• Application of the list of offshore zones approved by the Bank of Russia Board of Directors in the analysis of persons entitled to dispose of FMI stocks (shares) directly or indirectly.
• Non-application of enforcement measures against depositories if they fail to comply with the deadline established in Russian law⁶ for crediting (debiting) securities solely in the case of discrepancies with higher-level foreign depositories.
• The procedure for the transfer of funds by Russian legal entities having Eurobonds-related obligations to Eurobond holders whose rights are recorded by Russian depositories without engaging foreign organisations.
• The procedure for depositories’ actions in the course of redemption of Eurobonds, including where obligations under Eurobonds of the Russian Federation and corporate Eurobonds are settled in full in connection with the issue of substitute bonds.
• The special procedure for paying yields on Russian and friendly issuers’ bonds issued according to Russian law without engaging foreign record-keeping institutions.
• The special procedure for paying dividends on Russian joint-stock companies’ shares to shareholders and holders of depositary receipts of shares without engaging foreign record-keeping institutions.
• Temporary requirements for the depositories’ activity related to the record-keeping of rights to foreign issuer securities by friendly foreign depositories not meeting the requirements established by Bank of Russia regulations.⁷
• Temporary requirements for the activity of registrars of securities holders with regard to how they open and keep certain non-residents’ personal accounts.
• Permission for FMIs to use, along with information from the news agencies Bloomberg and Refinitiv, information provided by National Settlement Depository, Interfax and Cbonds.ru or information provided by other organisations if National Settlement Depository, Interfax and Cbonds.ru do not have necessary information, based on a reasoned decision made by the relevant non-bank credit institution — to ensure compliance with regulations of the Bank of Russia and the Federal Financial Markets Service of Russia.

¹ Trade organisers, clearing houses, NCI-CCs, NCI-CDs, depositories, specialised depositories, security holder registrars, operators of information systems issuing digital financial assets, operators of digital financial asset exchanges, operators of investment platforms, operators of financial platforms, and credit rating agencies.

² 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’.

³ Incorporated into regulation: Bank of Russia Ordinance No. 6544-U, dated 27 September 2023, ‘On Amending Bank of Russia Ordinance No. 5549-U, Dated 14 September 2020, and Annex 1 to Bank of Russia Regulation No. 437-P, Dated 17 October 2014’.

⁴ Federal Financial Markets Service Order No. 10-19/pz-n, dated 23 March 2010 ‘On Approving Requirements for Depositories Engaged in the Record-Keeping of Rights to Foreign Issuer Securities Admitted to Public Offering and/or Public Trading in the Russian Federation’.

⁵ Incorporated into regulation: Bank of Russia Ordinance No. 6570-U, dated 9 October 2023, ‘On Amending Bank of Russia Ordinance No. 5099-U, Dated 22 March 2019’ (being registered by the Ministry of Justice of the Russian Federation).

⁶ Subclause 2 of Clause 11 of Article 8⁵ of Federal Law No. 39-FZ, dated 22 April 1996, ‘On the Securities Market’.

⁷ Subclause 1.2 of Clause 1 of Bank of Russia Ordinance No. 5311-U, dated 11 November 2019, ‘On the Criteria to Be Complied With By an Organisation Recording the Depository’s Rights to Underlying Securities in the Account Opened to This Depository as an Entity Acting on Behalf of Other Entities, for Issuing Russian Depositary Receipts, and to Be Complied With By a Foreign Organisation Recording Rights to Securities Where the Depository Has an Account Opened to It as an Entity Acting on Behalf of Other Entities, for Recording Rights to Foreign Issuers’ Securities in the Case of Their Public Offering and/or Public Trading in the Russian Federation’.

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20.11.2023 00.00.00