The CBR permanently bans the sale of securities from 'unfriendly' nations to non-qualified investors.
On October 2, the Bank of Russia issued instructions that define securities and derivative financial instruments only available to qualified investors.
These include securities of issuers registered in unfriendly countries or payments or accounting of rights in respect of which are made through the infrastructure of unfriendly countries, and deliverable derivative financial instruments, the underlying asset of which is the said securities.
The purpose of this instruction is to exempt non-qualified investors from assuming excessive sanctions risks on foreign instruments, the Central Bank said.
Non-qualified investors may acquire securities of friendly nations that are not accounted for by unfriendly infrastructure, as well as foreign securities whose issuers operate mainly in Russia and the Eurasian Economic Union.
The sale of securities of issuers from unfriendly countries to non-qualified investors has been limited by a Central Bank regulation. Since October 1, 2022, brokers were barred from execution of orders from non-qualified investors to purchase such securities, if their share in the investor's portfolio exceeded 15%.
From January 1, 2023, Brokers must discontinue the execution of any instructions from non-qualified investors to enhance their position in securities of unfriendly countries. In March, the Bank of Russia announced the extension of this ban, which is effective October 1, through October 1. The injunction will remain in force until a directive makes this restriction permanent, the regulator said in a statement.
In compliance with the Central Bank's instructions, the SPB Exchange has defined a list of securities that will be available to qualified investors beginning October 2, according to the central bank's instruction. The list consists of more than 1900 positions. Non-qualified investors will still be able to access securities listed on the Hong Kong Stock Exchange and quasi-Russian securities, the exchange said.
In turn, the Central Bank reported that from October 2 it will introduce restrictions on the application for the purchase of foreign issuer securities for non-qualified investors in accordance with the Central Bank's instruction. Its list of securities intended solely for qualified investors included 679 positions.
In turn, the Moscow Exchange said that from 2 October it will institute restrictions on filing bids to buy securities of foreign issuers for non-qualified investors in accordance with the Central Bank's instruction. The list of securities intended solely for qualified investors included 679 positions.