Entering Hong Kong remains a priority: SPb-Birzha on plans and current restrictions

Выход на Гонконг остается в приоритете: «СПб-биржа» о планах и текущих ограничениях

The head of "SPb-Exchange" Roman Goryunov answered popular questions of investors.

How SPb-Birzha works now

According to Goryunov, "there's a lot of work to do right now., related to business continuity". But the key principle of the site – best execution – has not changed..

Best execution is the execution of an order at the best price. If the share price in the domestic market is better, then the application will be executed there. If worse, then the transaction will be carried out at a price in the foreign market.

To reduce the spread between markets, the exchange reduced trading time and synchronized the schedule with international platforms. That is why she began the main auction in 16 hours in Moscow.

14 April, the exchange increased the time of trading: now they will be launched an hour earlier, in 15 hours.

Why the over-the-counter market does not work

Goryunov gave two reasons:

  1. Presidential Decree of 1 March restricted over-the-counter transactions.
  2. A significant part of the assets of this market is stored in the National Settlement Depository (NSD), with which Euroclear is temporarily out of service.

"We expect, that a solution will be found for both aspects of the constraints. We try to find a solution like with a regulator, so we expect clarity from international settlement systems”.

What restrictions did Euroclear impose?

Euroclear Bank is one of the places, where Russian depositories keep their assets. In early March, as part of Western sanctions, Euroclear blocked operations with NSD. It is for this reason that Russian investors cannot conduct transactions with Eurobonds., European shares and some ETF.

"It is important to emphasize, that the rights of the holders of the securities remained in force, but now it is impossible to withdraw these securities to another depository for transactions. With other places of storage at the "SPb-exchange" everything is fine, that's why, if investors have papers there, they have the opportunity to make exchange transactions with them”.

What tools are available now

1650 shares of international companies are available for exchange transactions. And these are the tools., which have recently been banned from trading:

  • Eurobonds;
  • euro-settled securities;
  • securities of companies from the CIS countries;
  • securities of companies listed on the LSE;
  • U.S. listed company securities: Yandex (SPB: YNDX), Mobile TeleSystems (SPB: MBT), Ozone (SPB: OZONE), Cian (SPB: CIAN), HeadHunter (SPB: HHR) и Nexters (SPB: WHERE).
  An example of luck in system trades

As Goryunov said, investors can buy and sell available shares without restrictions. He added, that after the purchase, the investor becomes the rightful owner of the shares, and the ownership can be confirmed by an extract from the Russian depository.

What about dividends on foreign stocks

“The delay in the payment of dividends is due to the fact, that dollar settlements were difficult for some time. Now the payment process is underway. At the moment, the mechanisms are somewhat violated in the financial market, which worked as standard for many years, therefore, there may be some delays with certain transactions".

What will happen to the receipts of Chinese companies in the event of delisting

Shares are the basis of any receipt. Therefore, the owner will be able to convert receipts into shares. And then you need to go to the site, which trades these shares. To mitigate the effects of delisting, Exchange wants to enter Hong Kong as soon as possible.

When will the Hong Kong exchange be available

According to Goryunov, The exchange is considering entering new platforms. Priority - Hong Kong.

"Technically, it takes several months.. But there are tax issues., which may delay this process. For example, we have been doing Hong Kong for several years, because at some point it became clear, that there are questions, which do not exist in Russian practice. For example, stamp duty — tax on transactions, which is in Hong Kong. It is difficult to estimate the timing, because there may be some pitfalls, which you could not have imagined from the very beginning.".

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