MOSCOW, July 13, Nadezhda Sarapina. US sanctions force partners to limit trading in Russian securities. Thus, the Kazakhstan depository notified brokers of the need to withdraw them from the circuit by August 10, 2024. The regulations included sovereign debt bonds, corporate bonds and shares. What to do and whether to wait for the next blocking — in the material .
Rumors and facts
In June, Washington significantly expanded financial sanctions against Moscow. The Moscow Exchange, the National Clearing Center (NCC) and the National Settlement Depository (NSD) fell into disgrace — all in order to limit the influx of funds into the country.
The motives are given in a press release from the US Treasury: “Russian President Vladimir Putin approved a number of measures to further attract capital through the Moscow Exchange from both Russian and non-Russian entities from “friendly countries,” which expands the opportunities for both Russians and non-Russians to make a profit from the Kremlin's war machine by investing in Russian sovereign debt, Russian corporations and leading defense enterprises.»
In addition, the United States warned foreign financial institutions that the risk of being subject to secondary sanctions for helping Russia is now higher. Some organizations and individuals that Washington considered involved in such actions have already been added to the list. Among others, Kazakhstan suffered.
The country's Central Depository called on clients to send orders to withdraw securities issued in Russia. Otherwise, there may be restrictions on the fulfillment of obligations under them.
“The Central Securities Depository notifies you that you must, by August 1, 2024, carry out transactions with the participation of National Settlement Depository JSC that are customary and necessary for the alienation of debt or shares in favor of persons who are not US persons and are not included in the list of US blocking sanctions,» RBC quotes the order.
The date is due to the fact that applications must be executed before the expiration of the license of the US Treasury Department's Office of Foreign Assets Control (OFAC), issued after the introduction of blocking sanctions against the Moscow Exchange and its structures, including NSD. It is valid until August 13.
< br />Investment adviser Yulia Kuznetsova, in a conversation with, explains that the letter indicates a deadline of August 10, after August 13, trading in Russian securities may be blocked. However, brokers report the withdrawal of assets before August 1, as there is a possibility that “afterwards there will be problems in processing requests taking into account restrictions,” “which ones are not specified,” she adds.
Press Secretary Russian President Dmitry Peskov noted that there is no more detailed information yet. “No, to be honest, we don’t have the details. Of course, we will check with our economic departments,” he commented.
It’s better to obey
In turn, the Kazakhstan Stock Exchange (KASE) confirmed the sending of notifications and reports that the established withdrawal deadline is August 10.
The information was confirmed by Deputy Chairman of the National Bank of Kazakhstan Aliya Moldabekova. “After this, our central depository notified its depositors that after August 13 — this is precisely the period during which final transactions can be made — problems are possible, because the main settlement depository for Russian securities is NSD,” — she explained at a briefing with journalists on July 12.
There are currently about 140 types of securities issued by Russia in circulation. Including sovereign debt bonds, corporate bonds and shares. In 2022, they were bought from foreigners at a reduced price.
Economist and communications director at BitRiver Andrei Loboda considers the decision unprofitable and forced, since Astana risks weakening its own position as an international financial center.
«Apparently, there is informal pressure — there are no official recommendations from the US or EU regarding the Kazakhstan depository,» he argues.
Alexander Shneiderman, head of the customer support and sales department of the Russian dealer Alfa-Forex, reports that the measure is advisory in nature. Clients are given time to withdraw assets and the opportunity to minimize risks.
This is confirmed by the chief analyst of the Kazakh broker Neomarkets Oleg Kalmanovich. “What happens next depends on the quality of execution and the satisfaction of the Central Bank with the work done by the brokers. If the measures and results seem too lenient, direct orders and various kinds of sanctions from the banking regulator may follow,” he notes.
As a result, short-term customer churn is likely. According to Shneiderman, about 20-30% of investors can withdraw assets and redirect them to other markets.
Kalmanovich, in turn, believes that the law of “overflowing vessels” will work. “Restrictions in Kazakhstan may act as a magnet for the return of Russian investment capital to their native land. There is a possibility that part of the Kazakh capital will follow, especially those investing in Russian business through the Central Asian local exchange,” he predicts.
The expert believes that capital migration will lead to an increase in the Moscow Exchange index. However, in the moment, fear of losses can also cause a negative effect. “The main thing is not to make emotional decisions, but to carefully monitor events, weighing the pros and cons, and only then decide where to allocate your capital,” he explains.
Hazy prospects
The head of the National Bank of Kazakhstan, Timur Suleimenov, assured media representatives that the financial system has been adjusted since 2022 and “there is no and will not be a significant effect «. However, he said that in order to avoid secondary sanctions, it is planned to buy out KASE’s share from the Moscow Exchange. She now owns 13.1% of the shares.
In general, economists believe that the withdrawal of securities from the Kazakh market is temporary, but a forced blocking should not be expected. Although it is still safer to withdraw assets. It is best to store them in Russian jurisdiction, Kuznetsova points out.
According to her, investors are afraid of blocking, segregation and other restrictions that “may be introduced on the instructions of counterparties or Western depositories, such as Euroclear.” There are already some difficulties with opening brokerage accounts in Kazakhstan. However, it is still possible to obtain a TIN in Kazakhstan and open a bank account using a Russian passport.
Shneiderman believes that in the future the rules may change and there is a possibility that additional over-the-counter instruments will appear that will allow Russians to continue investing.
In general, analysts advise caution and monitoring the situation. In the near future, it is possible that both the tightening of sanctions and the creation of new ways to circumvent them.