Russia: Update to the handling of ADR GDR Programmes of Russian underlying equities
This Announcement supersedes A23056.
Clearstream Banking1informs clients that on 5 July 2024, the Luxembourg authorities advised Clearstream Banking that the EU Commission had clarified on 24 May 2024 the interpretation of Article 6b (5aa) of Regulation (EU) No 269/2014 and informed all EU Member States that “[In view] of supporting disinvestment from the Russian market by European investors may sustain the reading that for applications submitted before 25 September 2023 and authorised by the national competent authorities of the Member States before 25 December 2023, conversion of depository receipts may take place after 25 December 2023. Given that the implementation of EU sanctions ultimately falls within the competence of Member States, we encourage Member States to mutually enable, in a spirit of sincere cooperation, conversions based on authorisations granted by the national competent authority of another Member State before 25 December.” The Luxembourg authorities have subsequently advised Clearstream Banking that they now align to this interpretation. This replaces the guidance issued to Clearstream Banking in November 2023 that conversion of depository receipts (DR) granted by the national competent authorities of an EU Member State before 25 December 2023 must also take place before 25 December 2023.
Accordingly, Clearstream Banking will process conversions instructed by its clients for ADR/GDR holders being nationals or residents of EU Member States holding authorisations in those programmes where conversions are currently supported by the depository agent and where conversions are permissible under EU, US and UK sanctions.
Clients intending to instruct conversions under the guidelines mentioned below are reminded, that OFAC’s General License 100 permits conversions into underlying shares issued in the National Settlement Depository only until 13 August 2024. Clearstream Banking expects that 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.
Clients whose clients received the authorisation from the competent authority pursuant to Article 6b(5aa) of Regulation (EU) 269/2014 with the stated timeframe, can convert a depository receipt 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 1012 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.’
For any ADR/GDR conversion instruction, in respect of the below securities, Clearstream Banking clients must, in the narrative field of their instruction (:70E: INST field in MT565 or Corporate Action Instructions Narrative in Xact Web Portal), represent that they have obtained authorisation under Article 6b(5aa) of Regulation (EU) 269/2014 and provide:
(a) the name of the competent authority of the Member State which has granted the authorisation,
(b) the reference number of the authorisation, and
(c) 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.
Conversion instructions may be accepted in the following Russia-related ADR/GDR progammes:
Common Code | ISIN code | Underlying | Security name |
32418384 | US67011U1097 | RU0009084446 | GDR NOVOROSSIYSK CSPP 144A REG |
32417710 | US67011U2087 | RU0009084446 | GDR NOVOROSSIYSK CSPP REGS REG |
11374891 | US6074091090 | RU0007775219 | ADR MOBILE TEL PJSC REG (1ADR/2SHS) |
22468022 | US6074091090 | RU0007775219 | ADR MOBILE TEL PJSC REG (1ADR/2SHS) |
25869486 | US67812M2070 | RU000A0J2Q06 | GDR ROSNEFT OIL COM REGS BR |
124406129 | US1641451042 | RU000A0JL4R1 | GDR CHERKIZOVO GROUP 144A REG (1DR/0.667SHS) |
124407524 | US1641452032 | RU000A0JL4R1 | GDR CHERKIZOVO GROUP REGS REG (1DR/0.667 SHS |
36273372 | US3133541025 | RU000A0JPNN9 | GDR FED GRID CO PJSC 144A REG |
36273577 | US3133542015 | RU000A0JPNN9 | GDR FED GRID CO PJSC REGS REG (1DR/ 500SHS) |
39197863 | US45835N1054 | RU000A0JPNM1 | GDR PJSC INTER RAO UES 144A REG |
39322790 | US45835N2045 | RU000A0JPNM1 | GDR PJSC INTER RAO UES REGS REG |
17822373 | US7416251079 | RU0009084487 | ADR PRIMORSKY SHIPPING (1ADR/10SHS) |
170465199 | US29355E2081 | RU000A100K72 | GDR EN GROUP PLC REGS REG 1DR/1SH |
133313133 | US8766292051 | RU0009033591 | ADR PJSC TATNEFT REG (1ADR/6SHS) |
131064853 | US69343P1057 | RU0009024277 | ADR PJSC LUKOIL REG |
131156707 | US69343P1057 | RU0009024277 | ADR PJSC LUKOIL REG |
64985922 | US71922G1004 | RU000A0JRKT8 | GDR PJSC PHOSAGRO REG (30GDR/1SHS) |
247334742 | US71922G3083 | RU000A0JRKT8 | GDR PJSC PHOSAGRO REGS BR (CANCELLATION ELIG |
36956348 | US00501T2096 | RU0009028674 | GDR PJSC ACRON REGS REG (10GDR/1SHS) |
32415202 | US50218G2066 | RU000A0JPFP0 | GDR PJSC LSR GROUP REGS BR (5GDR/1SHS) |
22035363 | US67011E1055 | RU0009046452 | GDR NOVOLIPETSK (144A)(1DR/10SHS) |
22035436 | US67011E2046 | RU0009046452 | GDR NLMK REG S |
131218320 | US69343R1014 | RU0009062285 | GDR PJSC AEROFLOT REG |
132253030 | US69343R2004 | RU0009062285 | GDR PJSC AEROFLOT REGS REG (1GDR/5SHS) EXCH |
31526655 | US6708481006 | RU000A0JNG55 | GDR OGK OAO 144A REG 1 DR/100 SHS |
31527996 | US6708482095 | RU000A0JNG55 | GDR JSC OGK-2 REGS REG 1 DR/ 100 SHS |
Notwithstanding the above requirements, clients are required to ensure that any instruction submitted to Clearstream Banking 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.
Impact on clients
Clearstream Banking will resume processing of DR conversion instructions on or around 12 July 2024, for those DR programmes where DR agents are supporting the conversion and have their books open for cancellation.
Clearstream Banking will provide updated corporate action notifications to the holders of applicable DR programmes for which the conversion is possible.
Further information
For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG clients using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany, and registered in Register B of the Amtsgericht Frankfurt am Main, Germany, under number HRB 7500.