Euroclear and Clearstream halt settlements for Russian securities
02 March 2022 Europe
Image: ako photography
Euroclear Bank and Clearstream are no longer accepting Russian ruble (RUB) as a settlement currency on their international central securities depositories in response to the Russian invasion of Ukraine.
Euroclear announced yesterday (1 March) that it would no longer accept payment settlement instructions in Russian domestic securities.
In addition, Euroclear clients are no longer allowed to transfer any RUB to ING Bank, Euroclear’s cash correspondent in Moscow.
Euroclear urged its clients to review their instructions already in the system to ensure that they are compliant with sanction regulations.
To the extent legally permissible, Euroclear added that clients “should wire out any remaining long balances in RUB as soon as possible”.
VTB Bank, Russia’s second-largest bank after Sberbank, has already been disabled as Euroclear’s cash correspondent.
Clearstream has also told Securities Finance Times that settlement in certain security codes is no longer possible on its platform. It is also no longer possible for certain entities to distribute new instruments on Clearstream.
The Deutsche Börse-owned post-trade service also said RUB is no longer an eligible settlement currency. In addition, domestic and internal delivery versus payment settlement in RUB is no longer possible.
Russia’s National Settlement Depository (NSD) has blocked all securities held on Clearstream Banking’s foreign nominee holder account until further notice.
Clearstream Banking understands that NSD is required to suspend payments on securities issued by Russian entities to foreign legal entities and individuals. NSD will not credit such proceeds to Clearstream Banking’s account until further notice.
The news follows SWIFT’s decision to block some Russian banks from its international payments system.
SWIFT’s change in operations comes after financial sanctions imposed by the west, including blocking Russia's central bank from international operations.
The European Commission released a statement on 26 February, outlining: “We, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States condemn Putin's war of choice and attacks on the sovereign nation and people of Ukraine.”
Euroclear announced yesterday (1 March) that it would no longer accept payment settlement instructions in Russian domestic securities.
In addition, Euroclear clients are no longer allowed to transfer any RUB to ING Bank, Euroclear’s cash correspondent in Moscow.
Euroclear urged its clients to review their instructions already in the system to ensure that they are compliant with sanction regulations.
To the extent legally permissible, Euroclear added that clients “should wire out any remaining long balances in RUB as soon as possible”.
VTB Bank, Russia’s second-largest bank after Sberbank, has already been disabled as Euroclear’s cash correspondent.
Clearstream has also told Securities Finance Times that settlement in certain security codes is no longer possible on its platform. It is also no longer possible for certain entities to distribute new instruments on Clearstream.
The Deutsche Börse-owned post-trade service also said RUB is no longer an eligible settlement currency. In addition, domestic and internal delivery versus payment settlement in RUB is no longer possible.
Russia’s National Settlement Depository (NSD) has blocked all securities held on Clearstream Banking’s foreign nominee holder account until further notice.
Clearstream Banking understands that NSD is required to suspend payments on securities issued by Russian entities to foreign legal entities and individuals. NSD will not credit such proceeds to Clearstream Banking’s account until further notice.
The news follows SWIFT’s decision to block some Russian banks from its international payments system.
SWIFT’s change in operations comes after financial sanctions imposed by the west, including blocking Russia's central bank from international operations.
The European Commission released a statement on 26 February, outlining: “We, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States condemn Putin's war of choice and attacks on the sovereign nation and people of Ukraine.”
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