Central Bank of Russia launches consultation on a new framework for depository accounting of foreign securities and foreign investors’ holdings of Russian assets

The Central Bank of Russia has submitted for public discussion a report proposing changes to how foreign securities are admitted to and recorded within Russia’s depository accounting system, and how Russian depositories should interact with foreign counterparties when recording Russian assets. The proposals are intended to mitigate investor risks that have emerged from cross-border custody and differing legal and operational models. The paper highlights frictions arising from differences between Russia’s direct ownership model and jurisdictions that use indirect ownership via nominee holders, where an intermediary may be recognised as the owner when a depository opens an account abroad. Against this backdrop, the proposals would limit admission to the Russian market to foreign assets recorded in a manner aligned with Russian practice, with securities recorded under different home-country rules to be traded as depositary receipts. The report also addresses depository liability to clients where foreign states may restrict rights for regulatory reasons, including circumstances in which a depository could be released from liability if it demonstrates it took all available measures to restore violated rights and assessed the financial standing and business reputation of its foreign counterparty at contract inception. For foreign investors’ rights to Russian securities, the paper sets out options including modernising the foreign nominee holder institution through regular owner disclosure or segregation with mirrored per-investor transactions in Russian accounting institutions, and considering a move away from intermediaries so assets are recorded directly in foreign investors’ accounts with Russian depositories. Comments are invited through 1 July 2025.