Kazakhstan Exchange assesses risk of sanctions due to Moscow Exchange

The restrictions imposed by Washington on the Moscow Exchange will not affect the activities of the Kazakhstan Stock Exchange (KASE), in which the latter holds a 13.1% stake, the organization's press service reported.

KASE clarified that, according to the order of the US Treasury Department's Office of Foreign Assets Control (OFAC), sanctions apply only to legal entities in which 50% or more of their shares are directly or indirectly controlled by entities on the SDN list—either individually or jointly with other sanctioned entities.

"KASE is not one of these entities, and the restrictions do not affect the operations of the exchange or the KASE Clearing Centre. Therefore, the Kazakhstan Stock Exchange and the KASE Clearing Centre continue to operate as usual. Trading, clearing, and settlement will be conducted in accordance with standard regulations," the exchange said in a statement.

The press service also noted that KASE intends to "consider continuing its business relationship" with MOEX, taking into account the imposed sanctions.

The US expanded sanctions against RUSSIA yesterday, June 12. Restrictions were imposed on the Moscow Exchange and the National Clearing Center (NCC, part of the Moscow Exchange and National Settlement Depository group), which acts as a counterparty in all currency transactions on the Moscow Exchange.

Washington believes that the Russian government's capital-raising measures against the Moscow Exchange are expanding the opportunities for Russian and foreign citizens to "profit from the Kremlin's war machine by investing in Russian sovereign debt, Russian corporations, and leading Russian defense enterprises."

Following the imposition of sanctions, the Moscow Exchange announced that, starting June 13, it would resume trading on the foreign exchange and precious metals markets for all instruments, except for currency pairs against the DOLLAR and euro. Trading on the stock and money markets and the standardized derivatives market (SDM) would continue for all instruments, with the exception of instruments settled in US dollars and euros. Trading on the derivatives market would continue as usual.

The Central Bank emphasized that it is suspending exchange trading only in dollars and euros; transactions with these currencies will continue to be conducted on the over-the-counter market.

"To determine the official exchange rates of the US dollar and euro against the ruble, the Bank of Russia will use bank reports and information received from digital over-the-counter trading platforms. <...> Companies and individuals can continue to buy and sell US dollars and euros through Russian banks," the Central Bank clarified.