Insights into Russian Forced Transfers and CySEC’s Latest Directive
CX Financia Ltd like to share a significant update from the Cyprus Securities and Exchange Commission (CySEC) regarding recent regulatory changes affecting the financial industry (circular C596)
Forced Transfers Under Russian Federation Law: What You Need to Know
On 14 July 2022, the Russian Federation introduced Federal Law No. 319-FZ (commonly referred to as ‘Law 319-FZ’). This law brought amendments to Federal Law No. 114-FZ from April 2022, with far-reaching implications for the transfer of Russian issuers’ securities.
Under Law 319-FZ, individuals and entities holding Russian securities, including local shares, bonds, and Eurobonds, which had been restricted for transfers by non-Russian custodians due to European Union Council’s Decisions and Regulations (EU Restrictive Measures) and international sanctions, were granted the ability to initiate ‘Forced Transfers.’ These transfers enable the movement of securities from a non-Russian custodian account to a Russian custodian, specifically through the Russian National Settlement Depository (NSD).
Moreover, on 19 December 2022, Federal Law No. 519-FZ came into effect, further expanding the eligibility criteria for transferring Russian securities out of foreign custody service providers. Detailed information and FAQs on Forced Transfers under Law 319-FZ are available on the NSD website.
Understanding Forced Transfers: What It Entails
Following the implementation of Law 319-FZ, individuals holding Russian issuers’ securities were required to submit a set of identification and security-holding confirmation documents to the NSD or Russian investment firms maintaining accounts for these securities with non-Russian custodians (such as Euroclear, Clearstream, or any CIF). Successful applications allowed the transfer of custody for these securities to Russia.
CySEC’s Request to Regulated Entities
In light of these developments, CySEC kindly requests regulated entities whose customers have undertaken ‘Forced Transfers’ to complete the requested information found in the specific Excel file mentioned in the circular. Please ensure this information is submitted to CySEC via email at [email protected] no later than Monday, 25 September 2023.
How can CX Financia Ltd help?
With years of industry experience and a dedicated team of financial experts, CX Financia Ltd specializes in catering to the unique needs of the regulated entities. We possess an in-depth understanding of the regulatory landscape and market intricacies, ensuring your company’s operations are seamlessly aligned with the latest guidelines
.
