Russia: Russian Presidential Decree 840 – Impact on Russian domestic equities and Russia-related ADR Conversions
Clearstream Banking1 informs clients that Russian Presidential Decree No.840 dd. 2 October 2024 (“Decree 840”) obliged the Central Bank of the Russian Federation to take steps to require Russian domestic nominee account holders to open C-Type accounts in the shareholder register of Russian joint-stock companies and to transfer their holdings into the register. This has led Russian custodian banks that are nominee shareholders of Russian joint stock companies to suspend settlement operations with effect from 2 October 2024, including settlement instructions with an intended settlement date prior to 2 October 2024 that were unsettled on 2 October 2024.
Clearstream Banking has received professional advice to the effect that Decree 840 and the related decisions of the Central Bank of the Russian Federation do not address Foreign Nominees Account Holders and that the accounts of Clearstream Banking with the National Settlement Depository (Depository 5R) are formally unaffected by these measures.
The Decree and the decision of the Central Bank of the Russian Federation provide context to Clearstream Banking’s Announcement D24030. Clearstream Banking understands that as a result, no domestic settlements between the accounts of the Depository Agent banks and investors’ accounts in relation to Clearstream Banking’s instructions to convert holdings in Russia-related ADR programs have been processed since 2 October 2024. Clearstream Banking anticipates that positions will be returned by the Depository Agent banks. However, the returns will be booked to Clearstream Banking’s accounts only once the Depository Agent Banks and Clearstream’s depositories have made their own determination of whether such the returns would comply with applicable sanctions, including those of the US and the EU.
Clearstream Banking is closely monitoring the situation and will provide further updates when received.
Clearstream Banking shall bear no responsibility and will not be held liable in case of any consequences, losses, or damages, which may be suffered by holders due tothe rejection/reversal of the transactions.
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.