EN
On February 1, NSD sent targeted notifications to clients regarding further interaction procedures between NSD, clients, and Euroclear.
On January 10, NSD sent targeted notifications to clients regarding further interaction procedures between NSD, clients, and Euroclear.
Due to numerous inquiries from depositories and NSD's inability to submit instructions to Euroclear, including for debiting securities and funds from NSD accounts via all existing electronic communication channels (Outgoing Message No. 1741 dated 06/06/2022 "On Restricting the Ability to Send Messages to Foreign Depositories"), on January 5, 2023, NSD requested Euroclear to provide alternative channels for transmitting client instructions under the Belgian Treasury's General Conditions.
On January 6, 2023, in response to the request, Euroclear stated that to consider the possibility of transmitting instructions and the channel for their transmission, a copy of each official authorization from the Belgian Treasury (hereinafter – Authorization) must be submitted to Euroclear, obtained by each party under the Belgian Treasury (MoF) publication establishing the general conditions for applying paragraph 5 of Article 6b of EU Regulation (EC) No 269/2014.
Once Euroclear receives copies of such Authorizations, reviews the details included in them, and assesses whether the Authorizations were obtained properly, Euroclear will inform about the possibility and channels for transmitting instructions. Euroclear is not prepared to provide technical solutions for transmitting instructions in advance without reviewing the content of each Authorization received by NSD clients from the Belgian Treasury.
NSD recommends that depositories who have obtained an Authorization submit a copy of it along with a cover letter via electronic communication channels stipulated in the depository agreement.
Attention to depositories whose NSD depository accounts hold foreign securities
In response to numerous client inquiries regarding interaction with Clearstream and Euroclear for asset unlocking, NSD sent targeted Offer letters to clients on January 4, 2023, to terminate depository account agreements regarding foreign securities.
All depositories intending to submit applications for asset unlocking under the issued licenses must send NSD an Acceptance of termination in the form attached to the offer. The contractual relationship will be terminated from the date NSD receives the Acceptance.
Upon request, NSD may provide clients with a confirmation letter regarding the termination of contractual relationships for foreign securities servicing.
If your depository account holds foreign securities and you have not received the aforementioned offer, please contact your personal NSD manager.
Additionally, NSD sent targeted additional information to clients regarding the data transmission format to foreign depositories Clearstream and Euroclear under current restrictions.
At NSD's working meeting with Euroclear on December 30, 2022, Euroclear essentially reaffirmed its previously stated position and informed NSD that it cannot discuss practical aspects of interaction in advance without reviewing what the Belgian Treasury would describe in an Authorization in the event of a positive decision.
On December 30, 2022, NSD's legal advisor submitted an inquiry to the Belgian Treasury regarding the implementation and interpretation of the General Conditions.
NSD continues work aimed at finding a solution for unlocking client assets.
In connection with the publication on the Belgian Treasury website on December 22, 2022, of the General Conditions of Paragraph 5 of Article 6b of Regulation (EC) No 269/2014 of the Council of the European Union of 17 March 2014 (hereinafter – General Conditions), NSD provides the following information regarding the implementation procedure of the General Conditions:
Unofficial information has been received from Euroclear stating that the Belgian Treasury will issue authorizations for operations related to the unlocking of securities and funds associated with securities payments. Euroclear will not act as the European operator (guarantor) specified in the General Conditions. Euroclear does not plan to request clarifications on the General Conditions and recommended that NSD contact the Belgian Treasury. NSD will submit the corresponding request to the Belgian Treasury shortly.
Additionally, NSD's legal advisors have received the following unofficial information from the Belgian Treasury. The European operator (guarantor) may be a subsidiary of the entity whose assets are blocked at Euroclear, or another company affiliated with such entity.
With respect to securities issued by Russian companies, the term “sale” refers to the sale of securities.
With respect to securities issued by non-Russian companies, the term “sale” may refer to the transfer of securities to a European broker or bank. The term “Russian company” is not defined.
With respect to funds associated with securities payments, the term “sale” may refer to a conversion operation (e.g., rubles to euros). If the payment currency is euros or other currencies, this term is not specified.
To date, no additional clarifications have been received from Euroclear or the Belgian Treasury.