Russia: Update on conversion process for depository receipts with Russian underlying securities held in the German market - update
This announcement supersedes D23041.
Note: This announcement, originally published on 12 July 2024 and updated on 23 July 2024 and 7 August 2024, has been further updated to add further programmes the list of ADR/GDR programmes. Changes have been highlighted.
Following the designation of the Russian CSD, the National Settlement Depository, by the United States on 12 June 2024 and the issuance of OFAC’s General License 100a permitting winddown transactions until 12 October 2024, Clearstream Banking1 has invested in an exceptional process to deliver a solution to clients to convert affected ADR/GDR holdings for the benefit of underlying investors who hold authorisation of an EU Member State pursuant to Article 6b(5aa) of Regulation (EU) 269/2014 by providing an alternative facility to enable conversions under specific conditions described below.
Clients intending to instruct conversions under the guidelines mentioned below are reminded that OFAC’s General License 100a permits conversions into underlying shares issued in the National Settlement Depository only until 12 October 2024. Depository agents will close their programmes to conversions in advance of that date to ensure that the conversions can be completed in the domestic market with the validity period of the license. Clearstream Banking's response deadlines will be communicated in the corporate action notification.
Clients whose clients received the authorisation by the competent authority pursuant to Article 6b(5aa) of Regulation (EU) 269/2014 before 25 December 2023, can convert a depository receipt (DR) with Russian underlying security held with the National Settlement Depository.
The relevant text reads:
'5aa. By way of derogation from Article 2, competent authorities of a Member State may authorise the conversion by 25 December 2023 by nationals or residents of a Member State, or an entity established in the Union, of a depositary receipt with Russian underlying security held with the entity listed under entry number 101 under the heading “Entities” in Annex I for the purpose of selling the underlying security, and the making available of funds linked to the conversion of the depositary receipt and to the sale of the underlying security directly or indirectly to that entity in Russia, under such conditions as the competent authorities deem appropriate and after having determined that:
(a) the depositary receipt was issued before 3 June 2022;
(b) the relevant request for authorisation is submitted by 25 September 2023;
(c) the holder of the depositary receipt is able to demonstrate that such conversion is necessary for the sale of the underlying security;
(d) the sale of the underlying security is compliant with prohibitions under Regulation No 833/2014, including Articles 5 and 5f; and
(e) no funds will be made available to any other entity listed in Annex I.'
Impact on clients
For any ADR/GDR conversion instruction, in respect of the below securities, Clearstream Banking clients must represent that they have obtained authorisation under Article 6b(5aa) of Regulation (EU) 269/2014 and provide:
- The name of the competent authority of the Member State which has granted the authorisation,
- The reference number of the authorisation, and
- The date of the authorisation.
The wording required in client instruction : “EU Reg. 269/2014 art. 6b 5aa COMP. License nb: xxxxxx date: dd/mm/yyyy– Issuing NCA: xxxx.”
Instructions without the required representation of sanctions compliance will be rejected.
Notwithstanding the above requirements, clients are required to ensure that any instruction submitted to Clearstream complies with applicable laws, including any applicable sanctions, including but not limited to those of the European Union, the United Nations, the United States and the United Kingdom.
Only positions where the books are open for conversion will be eligible. Currently, the programmes opened for conversion by the DR agents are the following:
ISIN code | Underlying | Security name | DR Agent |
US67011U2087 | RU0009084446 | GDR NOVOROSSIYSK CSPP REGS REG | JP Morgan |
US6074091090 | RU0007775219 | ADR MOBILE TEL PJSC REG (1ADR/2SHS) | JP Morgan |
US69343R1014 | RU0009062285 | GDR PJSC AEROFLOT REG | Deutsche Bank |
US0373763087 | RU0008958863 | ADR MOSENERGO PJSC REG (1ADR/50SHS) | BNY Mellon |
US7821834048 | RU000A0JPKH7 | ADR RUSHYDRO PJSC REG (1ADR/100SHS) | BNY Mellon |
US8688611057 | RU0009029524 | ADR SURGUTNEF PJSC REG | BNY Mellon |
US3682872078 | RU0007661625 | ADR PJSC GAZPROM REG 1 ADR / 2 SHS | BNY Mellon |
US36829G1076 | RU0009062467 | ADR GAZPROM NEFT PJSC REG | BNY Mellon |
US55315J1025 | RU0007288411 | ADR PJSC MMC NORILS REG (1ADR/0.1SHS) | BNY Mellon |
US8688612048 | RU0008926258 | ADR SURGUTNEF PJSC REG 1DR/10SHS | BNY Mellon |
Further to the above list of programmes, clients are informed that the conversion of the DRs for the below programmes will be facilitated in accordance with Announcement D23041, that is, the client’s position will be realigned from CBF’s account in DTCC to Citibank’s (acting as Clearstream Banking’s custodian) account in DTCC. Clients must follow the process described in the MT564 to instruct the conversion of the realigned DR positions.
ISIN code | Underlying | Security name | DR Agent |
US8766292051 | RU0009033591 | ADR PJSC TATNEFT REG (1ADR/6SHS) | CITI |
US69343P1057 | RU0009024277 | ADR PJSC LUKOIL REG | CITI |
US7785291078 | RU0008943394 | ADR PJSC ROSTELECOM REG | CITI |
Clients are reminded that books for conversion can be closed at any moment which will prevent any conversion of their DRs to underlying Russian shares.
Clearstream Banking makes no recommendation and gives no investment, legal or tax advice regarding the above matters. Clearstream Banking shall not be liable, and clients electing to instruct conversion of their DRs bear sole responsibility, for any and all harmful consequences, losses or damages, which may be suffered by clients or DR holders in connection therewith.
Clearstream Banking shall bear no responsibility for any delay in case any of these cannot be acted upon or executed, due to sanctions, monitoring activities or any circumstance beyond Clearstream Banking’s field of action.
Further information
For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany, and registered in Register B of the Amtsgericht Frankfurt am Main, Germany, under number HRB 7500.