Russia: Update on actual DR conversions with Russian underlying securities - Update
Note: This announcement, originally published on 6 June 2022, 14 June 2022, 13 July 2022 and 15 July 2022, has been further updated to provide information about DR conversions. Changes have been highlighted.
Clearstream Banking1 informs customers that owing to the sixth package of EU sanctions published on 3 June 2022, that now designates the National Settlement Depository (NSD), the conversion programme for Depository Receipts (DRs) with Russian underlying securities was put on-hold.
Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) has provided their view through European Banking Federation (EBF) in relation to transactions involving the NSD. It has been clarified that, with the NSD as a designated entity in the Annex I of Council Regulation 269/2014, it is not possible to instruct any transaction which may, directly or indirectly, result in any charge payable to the NSD.
The NSD previously released an announcement that until 31 July 2022 inclusive the NSD will charge no fees for the services of transferring Russian shares to or from custody accounts of DR agents. Considering that the NSD will not derive any economic benefit as a result of the conversion instruction, competent authorities deem DR conversion as permissible under current EU sanctions.
The NSD has now released a new announcement informing of the extension of the fee waiver period until 14 August 2022 inclusive.
Impact on customers
- Clearstream resumed processing of DR conversion instructions on 18 July 2022, for those DR programmes where DR agents are supporting the conversion and have their books open for cancellation.
Clearstream has provided updated corporate action notifications to the holders of applicable DRs for which the conversion is possible.
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.