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The Central Bank of Russia restricts sale of securities by foreigners

3 марта 2022
20

On March 3, 2022, the State Duma of the Russian Federation has adopted the amendments to the Budget Code, which makes it possible to place the funds of Sovereign wealth fund (SWF) of Russia in government securities and promptly use additional oil and gas revenues to prevent a negative impact on the economy.

On February 28, 2022, the Central Bank of the Russian Federation has issued an order that de facto prevents the payment of dividends and interest on securities of Russian issuers to foreign investors. The ban is implemented not directly, but through the professional participants of the securities market - depositories and registrars must suspend the transfer of payments. Formally, interest on bonds continues to accrue, and joint-stock companies, both public and non-public, can distribute dividends, but investors cannot receive either. The ban is imposed for six months, or until the cancellation of the prescription, if it happens earlier.

The Bank of Russia also has issued an order prohibiting Russian brokers from selling securities on behalf of foreign clients.

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