Bank of Russia establishes requirements for terminating obligations under depository agreements

The Bank of Russia established new requirements which stipulate that obligations under depository agreements are terminated if the depository has its licence cancelled or quits the market.

The regulation approved by the Bank of Russia determines how organisations whose depository licence has been cancelled or depositories willing to voluntarily terminate their depository activity shall receive instructions from their depositors on the restitution of securities and money held by such organisations. The document also stipulates the procedure for the restitution of such assets in accordance with depositors’ instructions. Furthermore, it establishes the procedure for the restitution of depositors’ assets in the absence of instructions.

The new regulation is aimed at fine-tuning the mechanism of termination by the aforementioned organisations of their functions as nominal holders and enhancing the protection of securities holders.