Following the sanctions imposed on the St. Petersburg Stock Exchange, certain restrictions apply to foreign assets and their recovery processes. The Bank of Russia has clarified how these assets are treated within the current legal framework.
The presidential decree specifies that only foreign securities held in the accounts of the Central Depository Institution can be submitted for redemption when they are recorded by foreign organizations. This places a clear boundary on how assets stored within the exchange and depository chains are handled during the asset recovery process.
As a result, securities kept in the chain linking SPb-Bank, NSD, and foreign depositories will fall under the buyback obligations. Conversely, assets that are blocked as a consequence of sanctions on the St. Petersburg Stock Exchange will not be subject to the buyback mechanism. Those holding such blocked assets should not expect inclusion in the government buyback program.
The Central Bank advised market participants to seek clarification on the specifics from their broker or custodian. This guidance underscores the importance of professional counsel when navigating the complex landscape of post-sanction asset management and redemption procedures.
Discussions around the exchange of frozen assets have been part of a broader framework approved by the government. Applications for redemption are scheduled to open later this spring, with a defined window running through early May. Investment Chamber LLC was designated to oversee the process of purchasing foreign securities from investors, ensuring orderly participation from the public market. Investors were told they could submit a large number of instruments for redemption, and the plan outlined that these exchanges should be completed within a specified timeframe later that year.
In another facet of the program, foreign participants are allowed to acquire blocked assets from Russian holders via funds held in certain types of accounts. The expectation is that a substantial portion of those with frozen holdings will see a chance to recover some value, reflecting the broader aim of stabilizing personal portfolios amidst the sanctions environment.
There has also been clarification from the U.S. Treasury regarding options related to immobilized Russian assets, highlighting the ongoing international dialogue about how these assets are managed and moved under evolving regulatory conditions. Stakeholders are encouraged to monitor official updates to stay aligned with current rules and timelines.