Russia: Further information about type C accounts
Further to Announcement A22053, Clearstream Banking1 has implemented the following operational arrangements for reflecting entitlements received on the type C account (also referred to as an S account) that the National Securities Depository has opened in relation to the account of Clearstream Banking pursuant to Presidential Decree No 95.
Please find below a summary of main steps related to the maintenance of the CBL accounts at National Settlement Depository (NSD) and to the treatment of income proceeds related to RUB-denominated securities sub-deposited with the NSD (Depository Code 5R).
- NSD has opened a separate correspondent bank account of type C for Clearstream Banking in addition to the existing Clearstream Banking account.
- The correspondent bank account of type C is opened in RUB only and is generally blocked.
- The income received from the Russian issuers before 5 March 2022 inclusive and the tax refunds associated with such income was credited to the original correspondent bank account of CBL with NSD.
- The income received from Russian issuers after 5 March 2022 will be credited by the NSD to the type C account.
Clearstream Banking understands that income cash payment proceeds from Russian domestic securities will not be credited to Clearstream Banking’s account at the NSD but will be reflected on a type C account. Clearstream Banking has provided no instruction to the NSD to credit income proceeds or any other monies to the type C account. Clearstream Banking further understands that only a limited number of operations are permitted on the type C account and that any sums credited to that account are not generally available to Clearstream Banking. Clearstream Banking also notes that there can be no assurance that entries posted by the NSD to the type C account comply with applicable sanctions.
To reflect the income cash payment proceeds from Russian domestic securities held under Depository 5R, Clearstream Banking will open a sundry account for each customer account to which income proceeds posted to the type C account are ultimately due. The opening of these specific accounts will be done as soon as applicable in accordance with the availability of the information about treatment to be made to the upcoming payment due for customers holding the specific security.
Clearstream Banking will send an MT599 advising of the opening the sundry account and the relative account number. Balances ultimately due to the customer that have been withheld on the type C account will be reported via SWIFT MT950.
Customers will continue to receive the MT564 messages via their regular account on the applicable payments. An MT566 message advising about the payment will be set at 0 on the regular customer account while another SWIFT MT566 message will be sent in relation to the effective booking of the proceeds on the sundry account. In addition, Clearstream Banking will set up MT950 and MT566 SWIFT reporting on the sundry account.
Note: This specific sundry account setup (that is, one sundry account per customer account) will also be used to reflect the entitlement from additional scenarios in which proceeds are retained upstream and cannot be credited to Clearstream Banking’s account and not necessarily linked to securities at NSD, but as well to other securities impacted by sanctions (different currencies and markets) or non-access to RUB (like XS securities). This account is for reporting only, instructions for movements or withdrawals are therefore not allowed.
For example
- Custody proceeds retained at issuer level
- Custody proceeds retained at paying agent level
- Custody proceeds retained at CCB level
Clearstream Banking will transfer the funds reflected in this sundry account to customer accounts only after the sanction measures are lifted and once Clearstream Baking has gained access to the funds blocked upstream.
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
------------------------------------------
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 customers 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.
