Russia: Changes to I-type accounts linked to Decree No. 665
Clearstream Banking1 informs clients about the impact of changes at the National Settlement Depository (NSD) related to funds held on “I-type” accounts.
Further to the Russian Federation Presidential Decree No. 665 dated 9 September 2023, "on the temporary procedure for the settlement to residents and foreign lenders of Russian government obligations in government securities, denominated in foreign currency, and other obligations under international securities, (Decree No. 665)" that foresees an amended procedure in relation to the payment to holders of sovereign Eurobonds of the Russian Federation (Eurobonds), Clearstream Banking has been informed that the Russian CSD, the NSD, proceeded to the replacement of liabilities currently in "I" type accounts.
As per the information received by Clearstream Banking from the NSD, all "I" type accounts that were reflecting funds related to Russian sovereign Eurobonds coupons/redemptions with payment date until 15 September 2023 have been set to 0 and a new Interbank account was opened in the name of Clearstream Banking, Euroclear Bank SA and DTCC to reflect any remaining balances due after the expiry of the direct payments scheme in the equivalent foreign currency.
As a reminder, Presidential Decree No. 665, foresees the following amended procedure:
Russian sovereign Eurobonds coupons/redemptions with payment date until 15 September 2023
- Deadline for clients to submit documents to receive a direct payment in RUB: 7 November 2023.
- If documents are received after the deadline of 7 November 2023, payment will be done in foreign currency, from NSD's account opened with one of the international depositories. Clients should be informed in this respect that, pursuant to Article 2 of Regulation (EU) 269/2014 of 17 March 2014 (as amended), all funds and economic resources of the NSD shall be frozen within the territory of the European Union. This is applicable to assets (including foreign currencies) held by NSD with Clearstream Banking in Luxembourg.
Russian sovereign Eurobonds coupons/redemptions with payment date after 15 September 2023
- Deadline for clients to submit documents to receive a direct payment in RUB is 60 days.
- Payment will be done on the 91st day after the payment date.
- If documents are received after the 60-day deadline, payment will be done in foreign currency, from the NSD's account opened with one of the international depositories. Clients should be informed in this respect that, pursuant to Article 2 of Regulation (EU) 269/2014 of 17 March 2014 (as amended), all funds and economic resources of the NSD shall be frozen within the territory of the European Union. This is applicable to assets (including foreign currencies) held by the NSD with Clearstream Banking in Luxembourg.
This announcement does not represent a legally binding description of the procedure set up by the NSD and cannot be relied upon as such. Clients may wish to seek independent legal advice on the interpretation of the above procedure.
Clearstream Banking shall not be liable, and clients electing to follow the above procedure shall bear sole responsibility, for any and all harmful consequences, losses or damages, which may be suffered by clients or the holder of the Eurobonds in connection with the above procedure.
Clearstream Banking requests clients electing to follow the above procedure to always make an appropriate determination that such procedure falls within the permitted activities and is in compliance with all applicable sanctions, including those of the EU, the United Nations, the United Kingdom and the United States.
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.