US Internal Revenue Service Assigns Qualified Intermediary Status to NSD

07 November 2013
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Moscow, 7 November. INTERFAX - The United States Internal Revenue Service, (IRS), has signed an agreement with National Settlement Depository recognizing its role as a Qualified Intermediary (QI), the depository’s press release says.

NSD, a part of the MICEX-RTS Moscow Exchange Group, has been assigned the Qualification Intermediary’s identification number (QI-EIN) 98-0242512.

IRS is the U.S. federal government agency responsible for tax collection and tax law enforcement.

NSD is the first Russian company to receive the status of a Qualified Intermediary in respect of American securities. Any other Russian depository can apply for such status.

The status will allow NSD clients to reduce the tax rates for American issuers’ securities admitted to trading on the Moscow Exchange or in the OTC market, and to decrease Russian market participants’ costs related to the execution of securities owners’ rights.

As Eddie Astanin, Chairman of the Executive Board of NSD, told Interfax, for Russian residents the tax for yield on the US companies’ shares may be reduced from 30% to 10%, and the tax for yield on bonds may be increased from 30% to 0%. He added that this is applicable to the tax for dividend income and coupon income.

To date, there are no American issuers’ securities admitted for trading on the Moscow Exchange.

According to Eddie Astanin, NSD’s QI status is one of the necessary steps towards solving the issue of admitting US companies’ securities to the Moscow Exchange on a competitive basis in comparison with other major exchanges.

He said that clients wishing to reduce tax will submit to NSD a standard application for the service of tax reduction and the completed forms of certification of securities owners/holders in compliance with the IRS requirements. Prior to payment of securities income, NSD will confirm the number of securities in the depository accounts/sub-accounts submitted for the reduced tax rate and the status of the owner/holder of securities.

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