MOSCOW (Reuters) – Moscow Exchange, Russia’s largest bourse, on Friday said it planned a legal challenge against European Union sanctions on the National Settlement Depository (NSD) and would seek to protect the interests of Russian investors.
The NSD, Russia’s domestic paying agent, equivalent to the Euroclear and Clearstream clearing houses, plays an important role in the country’s financial system and is a key intermediary with international markets.
It was sanctioned by the EU in early June.
Financial market entities, including major Russian banks, brokers and asset managers, agreed on Friday with Moscow Exchange and the NSD to establish a club that would work together to protect investors’ rights, especially unqualified market participants.
“There are plans to challenge the European Union’s decision on including the NSD on sanctions lists,” Moscow Exchange said in a statement.
The EU sanctions on the NSD, as well as other Western measures aimed at restricting Russia’s access to global financial infrastructure, have blocked many investors’ access to securities held in jurisdictions outside Russia.
They have also played a part in driving Russia into its first major international debt default in over a century, something Moscow has blamed on the West and labelled a “farce”.
“Foreign infrastructure has been frozen and stopped performing its function,” Sergei Shvetsov, head of Moscow Exchange’s advisory board, said this week.
He called sanctions that make it impossible to move money from issuers to investors a “trap of legal uncertainty”.
(Reporting by Reuters; editing by Jason Neely)
