The Russian government has implemented stricter regulations for transactions involving shares and bonds of former foreign businesses effective March 20, 2023.

This was enacted through Government Decree No. 409 dated March 18, 2023, which revises the rules for granting permissions by the state commission overseeing foreign investments. These changes impact transactions involving shares of Russian legal entities, bonds of Russian issuers, federal loan bonds, and investment units of mutual funds. The scope of restrictions now encompasses all subsequent transactions of these securities, even if they were previously sold by owners from unfriendly countries to Russian residents or entities from friendly nations. Approvals for transactions involving banks require the Bank of Russia's sanction, while those involving companies need the sanction of the special government commission. These modifications do not affect credit organizations and non-banking financial institutions.

The list of transactions requiring regulatory approval now includes:

-         Transactions involving Russian securities acquired before March 1, 2022, by residents and non-residents meeting specific criteria, and non-residents not from unfriendly countries.

-         Transactions involving shares of Russian issuers obtained as a result of redemption of foreign issuers' securities acquired before March 1, 2022, by residents and non-residents.

-         Subsequent transactions with securities transferred based on commission approval.

These government measures aim to create additional asset management tools and guarantees for stable enterprise operations. They represent part of ongoing efforts over the past year to reduce threats to financial market stability. In March 2022, the government had established rules for transactions between Russian companies and citizens or companies from unfriendly countries, requiring coordination with the relevant government commission.