Law 319-FZ and Law 519-FZ were introduced in response to the European Union Council's Decisions and Regulations in respect to the restrictive measures and international sanctions that blocked the transfer of Russian issuers' securities held by non-Russian custodians.

Law 319-FZ, issued on 14 July 2022, provides that the owners of blocked Russian securities or persons for whose benefit such securities are held, can transfer their rights from an account held with a non-Russian custodian opened with the Russian National Settlement Depository (NSD) to an account opened with a Russian custodian (the forced transfers).

Law 519-FZ, effective from 1 January 2023, further expanded the eligible cases for transferring Russian securities out of foreign custody service providers.

To facilitate these forced transfers, the owners of Russian securities were required to submit identification and security-holding confirmation documents to the NSD or to the Russian investment firms who held accounts for such securities with non-Russian custodians like Euroclear, Clearstream or Cyprus Investment Firms. In turn, successful applications allowed the holders of Russian issuers’ securities to transfer the custody for these securities to Russia.

CySEC now prompts Regulated Entities, as defined in Circular 596, with customers who have undergone forced transfers to provide the required information by 25 September 2023, via email to eu.sanctions@cysec.gov.cy.

CySEC’s Circular 596 can be found here.