Read the CySEC Circular C596
Memo #50-2023
CySEC Circular No: C596
Date: 11/09/2023
Subject: Russian Federation Federal Laws No. 319-FZ and No. 519-FZ regarding the transfer of Russian securities to Russia (‘Forced Transfers’)
Purpose: To inform Regulated Entities on the matter of ‘Forced Transfers’ related to Russian Federation Federal Laws No. 319-FZ and No. 519-FZ.
In Summary:
CySEC has issued the Circular C596 on 11/09/2023 to inform the Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), UCITS Management Companies (‘UCITS MC’), Self-Managed UCITS (‘UCITS’), Alternative Investment Fund Managers (‘AIFMs’), Self-Managed Alternative Investment Funds (‘AIFs’), Self-Managed Alternative Investment Funds with Limited Number of Persons (‘AIFLNPs’), Companies with sole purpose the management of AIFLNPs, Small Alternative Investment Fund Managers (‘Small AIFMs’) and the Cyprus Stock Exchange, on the matter of ‘Forced Transfers’ for the transfer of Russian securities to Russia.
CySEC informs that, a new Russian Federation Federal Law No. 319-FZ (the ‘Law 319-FZ’) issued on 14/07/2022. According to the Law 319-FZ, the owners of Russian issuers’ securities, or persons for whose benefit the securities are held, including local shares, bonds and Eurobonds, which were blocked for transfers by non-Russian custodians due to European Union Council’s Decisions and Regulations (EU Restrictive Measures) and/or other international sanctions, could transfer their rights in such securities from an account held with a non-Russian custodian opened with the Russian National Settlement Depository (the ‘NSD’) to an account opened with a Russian custodian (the ‘Forced Transfers’).
The Russian Federation Federal Law No.519-FZ came into force on 01/01/2023 (published on 19/12/2022). This Federal Law No.519-FZ introduced changes to Law 319-FZ, by including additional eligible cases for transfers of Russian securities out of foreign custody services providers.
An FAQ for the applications on ‘Forced Transfers’ under the Law 319-FZ, can be found on the website of the National Settlement Depository (NSD), the central securities depository of the Russian Federation.
CySEC further informs that, following the enactment of the Law 319-FZ, under these ‘Forced Transfers’ requests and according to CySEC’s understanding, the owners of Russian issuers’ securities were able to submit a set of identification and security-holding confirmation documents to the NSD or to Russian investment firms which maintained an account for the Russian issuers’ securities with the non-Russian custodian (e.g. Euroclear, Clearstream or any CIF). Upon successful application, the holders of Russian issuers’ securities could effectively transfer the custody of such securities to Russia.
CySEC requests the Regulated Entities with customers that proceeded with ‘Forced Transfers’ to fill-in the requested information included in the Excel file “FORCED TRANSFERS' TRANSACTIONS LIST” that can be found attached on this Circular C596 and inform CySEC the latest by Monday, 25/09/2023, using the email address eu.sanctions@cysec.gov.cy.
The FAQ on the NSD website can be found on the link: https://www.nsd.ru/en/faq/319-fz/.
Read the CySEC Circular C596
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