About

Cur­rently, hold­ers of Rus­sian de­pos­it­ary re­ceipts are re­ques­ted to ex­change them for the un­der­ly­ing ori­ginal shares. How­ever, a func­tion­ing ex­change pro­cess has not yet been established.

The pur­pose of de­pos­it­ary re­ceipts is to make shares that are not trad­able abroad trad­able non­ethe­less. The back­ground to this per­miss­ible de­tour is the dif­fer­ent re­quire­ments of na­tional le­gis­lat­ors for list­ing shares on dif­fer­ent trad­ing venues.

Rus­sian DRs are also de­pos­it­ory re­ceipts that cer­tify the right to own­er­ship of a share. The de­pos­it­ory re­ceipts are is­sued by so-​called DR pro­gram banks (also is­suers), mostly lead­ing in­ter­na­tional in­vest­ment banks such as Bank of New York Mel­lon (BNYM), Citi Bank or JP Morgan.

In April 2022, the Rus­sian le­gis­lature ordered the ter­min­a­tion of all DR pro­grams. As of April 27, 2022, DR hold­ers can­not ex­er­cise vot­ing rights or re­ceive di­vidends on the un­der­ly­ing shares. How­ever un­paid di­vidends can be claimed by a DR holder after re­turn­ing the DRs and re­ceiv­ing the un­der­ly­ing shares.

The ex­change of ADRs cur­rently faces sig­ni­fic­ant chal­lenges. Even in the case of ap­plic­a­tions for con­ver­sion sub­mit­ted on time, there has not yet been a com­pre­hens­ive re­sponse from the Gazprom Bank and Raif­feis­en­bank re­spons­ible for each DR. Even if the con­ver­sion has already been suc­cess­ful in in­di­viual cases, a large num­ber of in­vestors are still worried.

Contact

We will be happy to an­swer any ques­tions you may have. Please con­tact us by e-​mail at the fol­low­ing ad­dress: ADR@​schirp.​com.