Russia clears more financial market operations over next two weeks

LONDON: Russia’s central bank has allowed a limited number of additional operations in financial markets over the next two weeks as it temporarily eases restrictions related to the Ukraine conflict.

Stocks and bonds last traded on the Moscow Stock Exchange on February 25, the day after Russia invaded Ukraine, after which the central bank curbed trading as Western sanctions plunged markets in turmoil.

This allowed trading in the ruble to continue, with the currency crashing to record lows against the dollar and euro.

On Friday, the central bank said trading in OFZ government bonds would resume on Monday. It remains to be seen when trading in instruments like stocks will be able to resume, as it seeks ways to clear a backlog of trades while avoiding a market meltdown.

On Saturday, the Moscow Stock Exchange said in a statement that the central bank had issued a permit authorizing additional operations from March 21 to April 1, “to reduce liabilities arising from transactions made before February 28, 2022 on the Moscow Stock Exchange. in the interests of non-residents, which are entities of foreign states engaged in hostile actions”.

Additional permitted operations include:

– Transactions in the event of non-compliance or poor performance of obligations by the participant

– Operations aimed at transferring (extending) the obligations of clearing participants and their non-resident clients

– Close positions by completing buy and sell transactions

– Transfers of securities based on the results of clearing on deposit accounts

In addition, the exchange of said settlement transactions may be carried out on:

– The transactions necessary to terminate the obligations arising from these transactions and the transactions related to them

– Operations resulting from the transfer of obligations on initial operations

“The authorization implies the possibility for market participants to carry out operations on the exchange aimed solely at reducing the obligations of their customers who are entities of foreign states that carry out hostile actions,” said the Moscow Stock Exchange. .

Russia has drawn up a list of “unfriendly” countries, which corresponds to those that have imposed sanctions. Among other things, agreements with companies and individuals from these countries must be approved by a government commission.

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