The Investment Chamber Publishes a Preliminary Calculator for Redeeming Blocked Foreign Securities
The government-appointed Investment Chamber has released a calculator designed to provide an initial estimate of the total value of foreign securities that Russian investors may offer for redemption. This tool marks a formal step in the process of exchanging blocked assets and is reported by Interfax as part of ongoing policy measures related to sanctions-affected holdings. The calculator is intended to give market participants a clearer sense of scale and timing, helping potential sellers understand where they stand before entering the redemption process.
The basis for the starting price of those securities is set in rubles, using the Central Bank exchange rate. This rate is applied to the closing price of securities traded on the main stock exchange as of March 22, 2024. The schedule for submitting applications is specific: Russians can begin submitting requests on March 25 at 10:00 Moscow time, and the window closes on May 8 at 19:00 Moscow time. This time framework is central to planning for both brokers and individual investors as they prepare their portfolios for potential redemption under the new regime.
Residents of the Russian Federation will be able to submit applications to sell blocked foreign securities with a total face value not exceeding 100 thousand rubles through licensed brokers, investment fund managers, or management companies. There is no fee linked to these applications. If the total value exceeds 100 thousand rubles, the system will automatically reduce the request to the 100 thousand ruble threshold, ensuring that all participants operate within the established limit. This approach aims to simplify administration while preserving clear caps on individual transactions.
The Investment Chamber stressed that authorized dealers may offer redemption securities with an initial total value capped at 100 thousand rubles, regardless of the overall size of a given foreign asset portfolio. This specificity creates a uniform entry point for participants and helps standardize initial offers across diverse investor profiles. It also signals a controlled pace for the redemption program, balancing accessibility with administrative manageability as the process unfolds.
Non-residents will have the option to access these assets using funds held in special accounts designated for such purposes, referred to as the C accounts. Applications from non-residents are scheduled to be accepted from June 3 to July 5, with the placement of assets expected to occur on July 29. This staggered timeline provides non-residents with a defined window to prepare and execute redemption strategies while aligning with the broader regulatory framework guiding foreign asset movements during the period of asset exchange.
For resident individuals, the ability to withdraw applications is restricted until September 1, 2024. After an application is submitted, sellers will not be able to dispose of the documents they have provided temporarily. Ownership, however, remains with the seller during this interim phase, reflecting the controlled nature of the exchange program and the need to preserve data integrity as the process progresses. The structure aims to prevent premature changes that could complicate settlement and verification steps later in the cycle.
Industry observers have previously highlighted the conditions surrounding the exchange of frozen assets held by Russians. These discussions focus on how the rules interact with market liquidity, price discovery, and the practical realities faced by investors amid the broader sectoral and geopolitical context. The current updates and the calculator tool appear to be aimed at increasing transparency and reducing ambiguity for participants navigating a transitional period for foreign securities within the domestic market framework.
Putin-era policies that relate to payments from the C accounts for residents and the overall management of blocked assets continue to shape expectations across investor circles. Market participants are urged to monitor official communications for any amendments, while continuing to assess how the timetable and value caps will influence trading strategies, risk assessment, and potential hedging considerations in the months ahead. In sum, the program reflects a deliberate step toward reorganizing exposure to restricted assets within a clearly defined, time-bound process that emphasizes orderly execution and accountability for all involved parties. [Source: Interfax]”