Bank of Russia simplifies Russian issuers' entry to foreign markets
The Bank of Russia cancels the limit on the portion of Russian issuers’ shares to be placed and publicly circulated outside Russia. The relevant draft ordinance has been posted for public discussion.
Currently, there are two effective restrictions on the placement and circulation of shares in foreign markets: the total number of such shares should not exceed 25% of the total stocks of the same type; and no more than 50% of the total equity offering may be traded abroad. These limits were introduced in order to reduce the trade activity streaming from the Russian market to overseas, among other things.
‘Recent years have seen a steady flow of liquidity under dual-listed shares to the Russian exchange market,’ comments Elena Kuritsyna, Director of the Corporate Affairs Department. ‘This includes both Russian companies with open depository receipts programmes and foreign entities with operations in Russia and secondary listing on the Russian stock exchange. Now, we have established a reliable settlement and accounting infrastructure, implemented state-of-the-art technologies for exercising corporate rights and involving shareholders in global corporate actions. By cancelling these restrictions we expect to remove unnecessary barriers and encourage Russian companies to enter public equity capital markets.’