Page 107 - RusRPTSept23

8.3 Stock market
8.3.1 Equity market dynamics
The Ministry of Finance and the Central Bank have developed a scheme that should help unfreeze the assets of Russian investors blocked in the West after the start of the war, exchanging them for the assets of foreign investors blocked in Russia, The Bell reported on August 23.
They have already prepared a draft decree for Russian President Vladimir Putin, which for this purpose will unblock part of the accounts of foreign investors in Russia. At the first stage, this will make it possible to unfreeze RUB100bn of frozen money of Russian retail investors, says Finance Minister Anton Siluanov. But there are no details and confirmation of consent to the plan by the second parties yet.
Siluanov spoke about the draft decree providing for the unblocking of assets at a meeting of the Council for Strategic Development and National Projects with the participation of Vladimir Putin and asked him to support the initiative.
The head of the Ministry of Finance recalled that the assets of more than 3.5mn Russians for RUB1.5 trillion remain blocked. “We envisage the beginning of the exchange of the assets of our citizens for the assets of foreign investors, which today are accumulated in type C accounts. At the first stage, we plan to unblock accounts of about RUB100bn belonging to retail investors,” Siluanov said, noting that this is necessary for “restoring confidence in the financial market.
The minister did not provide other details about the decree. How exactly it is planned to unblock the frozen foreign assets of the Russians has not yet been explained.
It is impossible to understand before the publication of the draft decree what mechanism the Ministry of Finance and the Central Bank are going to use and what categories of investors it will affect. “Of the discussions that took place, it was about the fact that the assets of retail investors with small packages would be unblocked, for whom it is not economically profitable to sue them,” Elena Ryazanova, a sanctions lawyer, told The Bell.
After the start of the war, the European depositories Euroclear and Clearstream ceased to conduct transactions on the accounts of the Russian National Settlement Depository, and he himself fell under EU sanctions last summer. As a result, part of the securities of Russian investors was frozen, and dividends and coupons on them ceased to flow. In parallel with this, foreign investors on the Moscow Exchange were also blocked. They cannot conduct transactions, and coupons and dividends on those assets that belonged to them before the blocking go to type C accounts, from which funds cannot be freely withdrawn abroad.
RUSSIA Country Report September 2023 www.intellinews.com