Moscow Exchange to sue over EU sanctions against NSD

The HEAD of the supervisory board of the exchange, Sergei Shvetsov, called the suit promising. In his opinion, the National Settlement Depository has a chance to release the frozen assets,

The Moscow Exchange is preparing a class action lawsuit due to EU sanctions against the National Settlement Depository of RUSSIA (NSD), head of the Exchange's Supervisory Board Sergei Shvetsov said at a session of the St. Petersburg International Legal Forum, broadcast on the website.

“On foreign securities: today I see nothing but a judicial perspective. That is, probably, a class action lawsuit should be filed. The European Union, imposing sanctions on the NSD, in general, blocked other people's assets,” Shvetsov explained.

He explained that NSD is neither a nominal owner nor a nominal owner. This is an accounting institution that records ownership of securities, as well as settlements on transactions. He manages Russian and foreign securities.

“If there is no political engagement of the courts, <...> that is, there is a significant chance to release the assets of third parties,” Shvetsov noted. According to him, the exchange considers the COURT case promising and announces further actions in this process on July 1.

What sanctions against NSD mean for payments on public debt and foreign shares Finance

The European Union has imposed unprecedented sanctions against Russian companies, banks and the Central Bank in response to military operations in Ukraine. On June 3, NSD was also included in the sanctions list, which was the largest in Russia in terms of the market value of equity and debt securities and had access to the international financial system.

The EU authorities noted that the depository plays a significant role in the functioning of the Russian financial system and its connection with the international market, which allows the Russian authorities to carry out their activities despite the sanctions.

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By June 10, €4.5-7 billion of funds from banks and investors from Russia were frozen on NSD's accounts, the Frank Media portal wrote, citing sources. The reason was the blocking of the “depository bridge” between NSD and European depositories (Euroclear and Clearstream) at the end of February. Because of this, payments were made manually.

Frank Media learned that up to €7 billion hung on NSD's accounts due to sanctions

On June 18, the president of the National Association of Stock Market Participants (NAUFOR), Alexei Timofeev, told RBC Investments that he plans to file lawsuits against international depositories in order to unblock investors' securities.

“In this direction, NAUFOR is working together with NSD and the Moscow Exchange,” Timofeev said. He pointed out that Russians and Russian companies that did not fall under the sanctions should not be limited in the disposal of their property in terms of EU law.

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