Automatic conversion of DR in Russian depositories starts on August 15

Automatic conversion of depository receipts into shares of Russian issuers, which are accounted for in Russian depositories, will begin on August 15, the Central Bank of the Russian Federation announced.

On Friday, the regulator’s board of directors approved the procedure for automatic conversion.

From the date of publication of this decision, depositories are not entitled to accept depositors’ instructions for the conversion of securities of a foreign issuer into shares of a Russian issuer. Unexecuted orders of participants, received by depositories earlier, are considered withdrawn on July 25.

The automatic conversion procedure will take place without the participation of foreign accounting institutions, reminds the Central Bank. „The depositories will carry out automatic conversion in a short time so that the holders of depository receipts will be able to receive Russian shares in the near future, which are not limited in circulation and in the exercise of rights on them,” the Bank of Russia emphasized.

At the end of June, the State Duma adopted amendments to the April law on the prohibition of the placement of DR on foreign exchanges and the delisting of existing ones, allowing the deconversion of receipts, actions with which are blocked due to sanctions restrictions, automatically or forcibly, depending on where the rights are taken into account – in a Russian or foreign depository. For owners whose rights are taken into account in Russian depositories, automatic conversion is provided without recourse to foreign infrastructure. Issuers will be required, within five working days from the date determined by the Bank of Russia (the countdown starts on August 15), to send a corresponding notification to the Russian depository, which, in turn, must perform operations to transfer shares of Russian issuers to DR holders in exchange for them.