According to the regulator, agreements for the sale and purchase of Russian stocks should not be made in foreign currency in on-exchange trading.
Federal Law No. 173-FZ, dated 10 December 2003, ‘On Foreign Exchange Regulation and Foreign Exchange Control’ generally prohibits any deals in foreign currency between residents, including those where foreign currency is used as a means of payment, except transactions in foreign securities made in on-exchange trading and operations associated with clearing settlements.
Given that all transactions in order-driven on-exchange trading are subject to mandatory clearing, the effective regulations set no limitations on settlements in foreign currency whether for domestic or foreign securities trades after the clearing.
The Bank of Russia believes that the spread and expansion of the practice whereby domestic securities (stocks) traded in the secondary market are sold and bought in the stock market for foreign currency may have a significant adverse effect on the stability of the Russian financial market and national currency. At the same time, to set transparent and equally applicable requirements for exchanges, the Bank of Russia initiates relevant amendments to the applicable regulation.
This news item was originally published by the Central Bank of the Russian Federation (CBR RU). For more information, please see the Source Link.
