Presidential Decree No. 840 On the Temporary Procedure for Certain Securities Accounting of 2 October 2024 (the "Decree") required all Russian custodians acting as nominee holders of their depositors' shares in Russian joint stock companies held in Type C accounts to transfer such shares from the Type C custodial accounts in the National Settlement Depository ("NSD") immediately to the relevant registrars of Russian joint-stock companies in the manner and time prescribed by the Bank of Russia.
The Bank of Russia Board of Directors' subsequent decision of 3 October 2024 (the "Decision") detailed the procedures and deadlines for the transfer:
Transactions authorised by the Government Commission for Control over Foreign Investments or by the Russian President are exempt and can be closed within seven days after 4 October 2024, i.e. before 11 October 2024.
The measure is taken in view of the expiration of the general licenses issued by the United States Department of Treasury's Office of Foreign Asset Control (OFAC) and the UK Office of Financial Sanctions Implementation (OFSI), which authorised certain transactions and operations through NSD until 12 October 2024.
The Bank of New York Mellon, the depository of global depository receipts for shares in some Russian companies, resumed earlier taking orders for conversion of the depository receipts until 12 October 2024. Many foreign holders applied for conversion of their DR's. But the Decree and the Decision stopped the execution of such unexecuted applications by the Russian custodians. The ultimate fate of the conversion of the GDR's will now depend on whether the OFAC and OFSI will extend General License 100A and, respectively, General License INT/2024/4919848.
Should you have any questions, please contact Vyacheslav Khorovskiy at vkhorovskiy@gratanet.com.
11 October 2024