Regulatory easing for securities issuers and exchanges in 2023
In 2022, the Bank of Russia introduced a number of easing measures effective through 31 December 2022 that have made it possible to more easily pass through the period of high volatility in financial markets, specifically to maintain the listing and the listing level of issuers’ securities and unit investment funds’ units, ensure issuers’ payments on securities amid the blocking of transactions by foreign record-keeping institutions, and limit the disclosure of information about registration actions.
1. Measures aimed at maintaining the listing and the listing level of securities
As issuers need to adjust to the new environment, which requires a longer period, and bring their operations (e.g., as regards corporate governance) in compliance with the requirements for keeping securities on the exchange’s quotation list, the Bank of Russia plans to extend, from the beginning of 2023, temporary measures related to listing that are still needed. Measures that have ensured a positive effect and are now not needed any longer will be cancelled.
Measures to be extended
— Temporary moratorium on the delisting of a unit investment fund’s investment units if the unit investment fund fails to comply with the requirements for the value of its net assets established by Bank of Russia Regulation No. 534-P1 and/or the exchange’s securities listing rules — until 1 July 2023.
— Temporary moratorium on the delisting of foreign issuers’ securities admitted to public trading in the Russian Federation upon the exchange’s decision pursuant to Clause 4 of Article 51.1 of the Federal Law ‘On the Securities Market’ in the case of their delisting on a foreign exchange conforming to the criteria established by the Bank of Russia — until 1 October 2023.
— Temporary permit not to comply with the requirement for avoiding delayed fulfilment of a foreign issuer’s obligations on its bonds, resulting from foreign states’ and international organisations’ unfriendly actions, in order to keep such bonds on the Russian exchange’s quotation list — until 1 September 2023.
— Temporary permit not to comply with the requirement for maintaining foreign issuers’ securities on the quotation list stipulated by Appendix 2 or Appendix 5 to Bank of Russia Regulation No.
Additionally, the Bank of Russia plans to extend the period when exchanges are allowed not to disclose, in the list of securities admitted to on-exchange trading and in the registration card of a security, information on facts of a default and/or a technical default of a foreign bond issuer occurring due to foreign states’ and international organisations’ unfriendly actions — until 1 September 2023.
Measures not to be extended after 2022
— Temporary permit not to comply with the requirements for the value of a unit investment fund’s net assets for keeping this fund’s investment units on the quotation list.
2. Ensuring dividend payouts
As foreign record-keeping institutions blocked transactions, including the transfer of funds that are payments on Russian securities, the Bank of Russia Board of Directors, by its decision, established a special procedure for 2022 for making dividend payouts to shareholders and holders of foreign securities certifying the title to shares (depository receipts). This procedure ensured the receipt of funds by securities holders despite the blocking of transactions by the foreign record-keeping infrastructure.
As the sanction pressure remains and it is impossible to predict whether foreign record-keeping institutions will process transactions, the Bank of Russia plans to make a similar decision on the procedure for making dividend payouts for 2023 as well, modifying it considering the practice of dividend payouts made in 2022.
3. Limiting the disclosure of information about registration actions
In 2022, in order to support issuers of issue-grade securities that are financial institutions, the Bank of Russia temporarily allowed them, in order to prevent new restrictions that could be introduced against them by entities from foreign states performing unfriendly acts, to send a request to the Bank of Russia, based on which the regulator would not disclose on its website the information about its decisions regarding issuers’ issue-grade securities to be admitted to on-exchange trading according to Clauses 7.3, 16.8, 16.10, 17.8, 17.9, 18.6, 18.7, 22.9, and 22.10 of Bank of Russia Regulation No. 706-P,4 as well as the information included in the register of issue-grade securities beginning from the publication date of this decision that should be published pursuant to Bank of Russia Regulation No. 703-P.5
This measure is planned to be extended through 31 December 2023.
1 Bank of Russia Regulation No.
2 Federal Law No.
3 Press release of the Bank of Russia, dated 6 March 2022.
4 Bank of Russia Regulation No.
5 Bank of Russia Regulation No.
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22.12.2022 16.10.00