EU tightens sanctions: bans investors from participating in Russian asset exchange scheme
In a stern directive from the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA), the European Commission has prohibited individuals and legal entities from EU countries from participating in an asset exchange scheme proposed by Russia. This announcement, made on Wednesday, July 24, underscores the EU's firm stance on the involvement of Russia's National Settlement Depository (NSD), which has been on the EU's sanctions list since June 2022, rendering any form of interaction with it impermissible.
The asset exchange scheme permits Russian and foreign investors to propose exchanges of western securities that are currently frozen in NSD accounts within EU central securities depositories for assets blocked in Russia from unfriendly investors stored in type "C" accounts, the directorate explains.
Scheduled to facilitate asset swaps on August 12, the broker "Investment Chamber," the organizer of this exchange, disclosed that Russian investors have offered assets worth a total of 35 billion rubles ($410 million). The scheme was intended to allow private investors holding assets valued up to 100,000 rubles ($1173) to participate, with approximately 2,500 asset names put up for sale.
Previously, an "Investment Chamber" representative highlighted that the exchange mechanism was designed to minimize the NSD's role to purely technical functions, mainly record-keeping of transactions. However, as clarified by the European Commission, "no funds or economic resources may be made available to NSD, either directly or indirectly."