Mandatory Corporate Actions with Russian Securities

To enable its clients and their customers to exercise rights attached to securities held by them, NSD:

• processes corporate actions conducted by securities issuers, including securities conversions, bonus issues, corporate restructuring and liquidations of issuers;
• undertakes a corporate action to repurchase securities of a public company at the request of a person who has acquired more than 95 per cent of the shares of the public company.
• provides clients with any other information relating to mandatory corporate actions for securities held in custody at NSD, including information on consolidation of securities issues, registration of additional stock issues, or other changes in issue-related parameters;
• distributes all information received from upstream depositories, registrars, or issuers to clients;

Financial instrument: Share

* For these corporate actions, the registrar is required to provide NSD with information on the number of securities to be credited/debited for each person named in the relevant list of securities holders (distribution list) (in a reconciliation request for global/package transactions for CSD nominee accounts or in a free-format message for nominee accounts).

Financial instrument: UIT unit

* For this corporate action, the registrar is required to provide NSD with information on the number of securities to be credited/debited for each person named in the relevant list of securities holders (distribution list) (in a reconciliation request for global/package transactions for CSD nominee accounts or in a free-format message for nominee accounts).

Financial instrument: Mortgage Participation Certificate

Financial instrument: Bond

Notification

Please refer to the link for the notification procedure for these Corporate Actions (CA).

CA Specifics

1. As a result of the entry into force of Federal Law No. 514-FZ dated 27 December 2018 "On Making Amendments to the Federal Law "On the Securities Market" and Certain Other Laws of the Russian Federation to Improve Legal Regulation of the Securities Issuance Process", to change the scope of rights attached to securities and/or to change the nominal value of securities, including in the event of their reverse split (conversion of two or more securities into one security of the same issue) or split (conversion of one security into two or more securities of the same issue), it is required to make relevant amendments to the issuance resolution. This process involves neither registration, nor offering of a new securities issue.  To reflect the amendments made to the securities issuance resolution upon increase in the share capital through increase in the nominal value of a single security (CA: INCR) or upon decrease in the share capital through decrease in the nominal value of a single security (CA: DECR), NSD, on the CA date, assigns a new depository code (ID) to the shares with the new nominal value and, on the basis of share transfer instructions received, makes necessary transactions in clients' securities accounts, namely: credits the entire number of shares with the new depository code (ID) and debits the entire number of shares with the old depository code (ID).
   
   The procedure for CAs involving changes in the nominal value of securities is shown in this presentation.
   
   In the event of changes in the scope of rights attached to securities, NSD processes such changes without moving securities to/from clients' accounts.
   
   
2. In connection with the Regulation of the Bank of Russia dated 29 June 2022 No 799-P "On Opening and Maintaining by the Holder of the Register of Securities Holders of Personal Accounts and Accounts Not Designed for Registration of Rights to Securities", no new UIT units will be registered in case of a Split of UIT units (OTHR(NTDF)). On the day of the CA, NSD will allocate a new depository code (ID) to the UIT unit resulting from the split and, on the basis of the UIT unit transfer instructions received, makes the following transactions on the clients' securities accounts: the total number of UIT units are credited with the new depository code (ID) and the total number of UIT units are debited with the previous depository code.
   
   
3. Upon completion of the following CAs:
• PARI – Pari-passu;
• CONV – Conversion;
• INCR – Increase in value;
• DECR – Increase in value;
• SPLF – Stock split / Change in nominal value;
• SPLR – Reverse stock split / Change in nominal value;
• BONU – Distribution of bonus issues;
• MRGR – Merger/acquisition conversion;
• SOFF– Spin-off distribution;
• EXOF – Exchange;
• WRTH – Write-off of worthless securities;
• REDM (UNTR) – Redemption of UIT units / Mortgage Participation Certificates;
• OTHR (RDUN) – Partial redemption of UIT units / Mortgage Participation Certificates,
  
  in addition to a standard statement (Form MS101), clients will be sent, via EDI channels, the following message (in ISO 20022 or ISO 15022 format):
  
  CACO (Corporate Action Movement Confirmation).
  In this case, the Payment Date for such CAs as CONV or BONU will be the date determined in accordance with the issuance resolution (the date on which the registrar completed the relevant transaction);
  
  the Payment Date for such CAs as WRTH, MRGR, SOFF, or EXOF (RRGN) will be the date of the entry made in the Unified State Register of Legal Entities;
  
  the Payment Date for such CAs as PARI, REDM, or EXOF (SHEX) will be the date of completion of the relevant transaction by the registrar;
  
  the Posting Date will be the date of completion of the relevant transaction by NSD (posting date for the securities account).
  For such CAs as INCR, DECR, SPLR, or SPLF for Russian securities, the field in question must be used to specify the date of transaction execution by the account servicing institution (the date of transaction execution by the registrar).
4. In a Form MS101 statement, in the field "Date of the transaction in the register/at the third-party depository", the date on which the transaction was completed by the registrar has to be indicated.
5. MS101 Form statements and Corporate Action Movement Confirmations (CACO) can also be viewed in the CA Web-client.

Message description	Form code	ISO 20022 Standard	ISO 15022 Standard
CA securities movement confirmation	CA361	Corporate Action Movement Confirmation (CACO)	МТ566
Securities Debit Statement	MS101	-	МТ566*

6. * For CAs for which a CACO (Corporate Action Movement Confirmation) is not required to be sent.
7. In the cases provided for by the laws of the Russian Federation, NSD will impose restrictions on securities dealing as follows:

In CAs connected with reorganization of a joint-stock company (JSC), such as:

• MRGR – Merger/acquisition conversion;
• SOFF – Spin-off distribution;
• EXOF – corporate restructuring through transformation; transactions in the relevant securities will be suspended on the date of receipt from the registrar of information confirming that transactions in NSD's account have been suspended, by making relevant changes to the securities' details form and activating the 'All blocked' blocking mode.

In the event of partial redemption of UIT units, without their owner's request for their redemption (OTHR (RDUN)):

• The relevant securities will be blocked on the basis of information received from the keeper of the register of UIT unit owners regarding the blocking of the UIT units in NSD's account, by transferring the securities to "Securities blocked for the purpose of a corporate action" section of the clients' securities accounts (sub-accounts 83).

In the event of closure of an investment fund (REDM (UNTR)):

• The relevant UIT units will be blocked in the securities accounts held with depositories from the record date until the date when the relevant transactions in the securities account in connection with the redemption of those UIT units are completed.
  The UIT units will be blocked on the basis of information received from the keeper of the register of UIT unit owners regarding the blocking of the UIT units in NSD's account, on the date as of which the list of UIT unit owners is compiled, by making relevant changes to the securities' details form and activating the 'All blocked' blocking mode.
• In the event of exchange of UIT units (EXOF(SHEX)):
• EXOF – transactions in the relevant securities will be suspended on the date of receipt from the registrar of information confirming that transactions in NSD's account have been suspended, by making relevant changes to the securities' details form and activating the 'All blocked' blocking mode.

In the event of repurchase of securities in accordance with Article 84.8 of the Federal Law "On Joint-Stock Companies":

• The relevant securities will be blocked without clients' instructions, at the close of business on the record date as of which the list of holders of securities to be purchased is compiled (other than the securities owned by the purchasing shareholder and his affiliates, provided that NSD receives information that allows to identify them, and any seized securities), by transferring those securities to "Securities blocked for corporate actions" section of the securities accounts (sub-accounts 83).

Governing documents

Interaction with clients in the course of conduct of mandatory corporate actions with Russian securities is governed by the following documents:

• Guidelines on the Procedure for Interaction between the Depository and Clients in the Course of Performance under the Terms and Conditions of Depository Operations of National Settlement Depository;
• Rules of Interaction with NSD in the Course of Corporate Information Sharing, Corporate Actions Processing and Other Transactions.

NB for registrars:

For the requirements as to how to complete electronic documents to be issued by registrars in accordance with the FCDR_17_02 messaging format to confirm transactions in NSD's account, please see this file.