The Central Bank described the mechanism for exchanging frozen assets of Russians and foreigners

The exchange of blocked assets between Russians and foreigners will not take place in the form of exchange trading, but “at the market price,” the deputy head said department of investment financial intermediaries Central Bank Olga Sizova. Her words transmit interlocutors of Frank Media who attended the meeting of the Bank of Russia with professional market participants.

At the moment, there is no information about the auction organizer, and in general, the exact procedure for the return of assets is still under preparation. However, at the meeting, the Central Bank presented an approximate concept of a mechanism for exchanging frozen foreign securities (FCS) of Russian investors (in the amount of up to 100 thousand rubles per portfolio) for those blocked in Russia assets of foreigners in type “C” accounts.

It is assumed that the auction organizer will first send invitations to make offers through the depositories. Depositories, in turn, will be required to notify their clients that they may make offers to sell blocked securities. Investors will send offers to sell their securities through brokers. As part of the exchange, foreign securities of Russians will be sent to a special section securities accountsthen the already sold securities will be transferred to the account of the auction organizer.

Subsequently, the auction organizer will send an invitation to purchase foreign securities offered for sale directly to non-residents, and they will also have to send the offer to their intermediaries. Foreigners will transfer funds to the account of the auction organizer, including from type “C” accounts – they will be transferred to the accounts specified in the offers, along with a list of securities sold and the prices at which the transactions were made. The broker can then transfer money to clients’ accounts if the client so chooses. Clients of Russian professional participants will not be charged a fee for the exchange procedure.

November 8, 2023 President of Russia Vladimir Putin signed Decree on measures for the exchange of frozen assets of Russians and foreigners “On additional temporary measures of an economic nature related to the circulation of foreign securities.” The document applies to securities recorded in NSD accounts in foreign depositories.

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