What is a depository receipt. Russian depository receipts Depositary receipts for securities of Russian issuers

depositary receipts, which can be found in the relevant sections. A Russian depository security is an equity security that has no par value and certifies the owner for the number of securities of foreign issuers specified in the receipt. The owner of the RDR (Russian) has the right to require the issuer to provide securities for which a receipt has been issued.

RDR Issuer

As with US and GDRs, an RDR issuer is a . According to the current Russian legislation, the depository may also act as the holder of the register of RDR owners.

Note that RDRs of a single issue certify the holder's ownership of shares or only one foreign issuer. Also, RDRs are issued for only one type (say, RDRs for equities or RDRs for bonds).

If the owner of the RDR has decided to redeem the depositary receipt, then the issuer (depositor) in Russia must transfer the securities to the owners. According to the laws of the Russian Federation, payments under RDR are made in rubles (unless another was established when issuing a depositary receipt). The depository must make payments no later than 5 days from the date of receipt of the order from the owner of the depositary receipt. After the owner of the RDR receives the securities, the depositary receipts are redeemed.

RDR issue

Let's single out the procedure for issuing Russian depository receipts in a separate list:

The issue of RDRs is approved by a decision taken by the authorized body of the issuer. Depository acts as an authorized body
State registration of RDR issue in progress
RDR placement in progress (closed or open subscription)

After the issuer accepts obligations to the RDR holders, a special agreement is concluded between the issuer that provides securities (a foreign company whose shares or bonds he wants to purchase), as well as the RDR issuer. Also, the provision may contain a clause on the possible termination of the agreement between the foreign issuer and the Russian depository (in which cases the termination occurs is prescribed in the agreement). In this case, the investor assumes all the risks of a possible default on obligations due to a broken contract between the issuers.

An additional RDR issue is not subject to registration - for this, changes are made to the decision on the issue of depositary receipts issued by the depository. A Russian issuer can issue RDRs for circulation only after the preparation of an act of state registration of the issue of these secondary securities. State registration of RDR is carried out within thirty days from the date of submission of documents.

DDR

As we know, listing is a regime that regulates the admission of securities to quotations on the stock exchange. Basic requirements for inclusion in the 3rd level of listing of Russian depositary receipts.

Mandatory registration of the securities prospectus;
Mandatory compliance of the securities for which the RDRs will be issued with the norms of the current legislation of the Russian Federation (including regulations from the field of financial markets that are in force in Russia);
The RDR issuer is subject to the requirements of the Russian securities legislation and is obliged to disclose information to investors about the securities for which depositary receipts are issued
Securities of foreign issuers are accepted for servicing in the Settlement Depository.

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(RDR, RDR) are securities circulating on the domestic stock market and certifying ownership of shares or bonds of a foreign company.

In other words Russian depositary receipts are a means of acquiring securities of foreign joint-stock companies in Russia (or a way of investing funds in the stock market of another country without withdrawing money from the Russian Federation).

At the same time, the owner of the RDR receives the entire range of rights provided for by the foreign security underlying such a receipt, namely, the shares are paid to him in proportion to his share, and he also has the right to vote at the meeting; on bonds, interest income is transferred to him in a timely manner, etc.

The mechanism of the functioning of RDR on the example of Apple

Suppose an American company that has been operating for quite a long time decides to attract investments from Russia, and for this it needs to issue Russian depositary receipts for its shares. This happens as follows, those Apple shares that will be the basis of future RDRs are deposited (i.e., assigned, “locked”) in a certain American bank, which is called the Custodian, while the “locked” shares become unavailable to American investors.

After that, information about these shares is transferred to a Russian bank that acts as a depository for Apple shares. The Russian bank then issues RDRs according to the number of securities deposited, and from that moment on, any Russian investor has the opportunity to purchase Apple's securities either from a Russian depository bank or on the stock exchange if the RDRs were brought to the open market.

Shares of which foreign companies are traded on the domestic market in the form of RDRs

At present, the RDR market is very poorly developed, in fact, there is only one RDR on it, issued on the shares of United Company RUSAL Plc, whose securities are traded on the Pan-European stock exchange Euronext. The custodian bank is located in Luxembourg and is called CLEARSTREAM, the Russian depositary bank is

Posted on the site 05.03.2011

Russian Depositary Receipts (RDRs) are a new instrument on the Russian stock market. On December 24, 2010, two Russian stock exchanges - RTS and MICEX - began trading in Sberbank of Russia depositary receipts certifying the rights to registered ordinary shares of United Company RUSAL Plc. Let us consider the essence and features of accounting for operations with depositary receipts.

The processes of globalization and integration of financial markets contribute to the emergence of new financial instruments that allow the movement of capital even with significant differences in national legal systems. Depositary receipts are a widely used tool in the world practice that allows organizing the circulation of securities outside the jurisdiction where they were issued.

The need for such a financial instrument to appear in Russia began to be discussed several years ago. The starting point in the creation of Russian depository receipts should be considered June 2006, when the Russian Government Decree No. 793-r dated 01.06.2006 approved the Strategy for the Development of the Financial Market of the Russian Federation for 2006-2008. The strategy stipulated that in order to stimulate the concentration of transactions with financial assets of other countries on Russian stock exchanges, it is necessary to create a legal framework for the issuance and circulation of Russian depositary receipts for these assets. In fact, this was the first step towards opening the Russian securities market to foreign issuers.

Features and prospects of Russian depository receipts

Let us consider in more detail what depositary receipts are in general and Russian depositary receipts in particular.

Simplistically, depositary receipts can be considered as securities representing a certain number of underlying shares (or bonds) and certifying the rights of their owner in relation to the underlying asset (shares, bonds) of a foreign issuer. Trading and settlement of depositary receipts take place outside the country in which the issuer of the underlying shares (or bonds) is registered. Issuers of depository receipts are depositories operating in the national stock market. They also transfer the rights to the corresponding number of securities issued abroad. The custodians of the underlying assets are depositories in foreign countries.

Basic terms

When describing the procedure for issuing and circulation of Russian depository receipts, the following terminology will be used:

— an RDR issuer — a depository established in accordance with the legislation of the Russian Federation that meets the requirements for the amount of equity (own funds) and the period of activity established by the regulatory legal acts of the FFMS of Russia;

— the issuer of represented securities is a legal entity established in accordance with foreign law;

— RDR registrar — RDR depositary issuer or registrar — a specialized organization that maintains the register on the basis of the issuer's instruction;

— custodian — a foreign registrar/depository that records the rights to represented securities and is included in the list approved by the federal executive body for the securities market — the FFMS of Russia;

— Russian Stock Exchange — a stock exchange on the territory of the Russian Federation that admits RDRs to trading with/without going through the listing procedure.

Russian depository receipts are a new instrument of the Russian stock market, the main essence of which is the possibility for foreign issuers to enter the Russian market through the implementation of depository programs for shares and (or) bonds.

The RDR release infrastructure can be represented as the following diagram 1:

Scheme. RDR 2 Release Infrastructure

Regulation of the rights of RDR holders

The regulatory legal framework for Russian depositary receipts consists of the following documents:

— Federal Law No. 39-FZ of April 22, 1996 “On the Securities Market” (introduces the concept and establishes general requirements for the issuance of Russian depositary receipts) (hereinafter referred to as the Law on the Securities Market);

— standards for the issue of securities and registration of prospectuses of securities, approved by the Order of the Federal Financial Markets Service of Russia No. 07-4/pz-n dated January 25, 2007 (establish the procedure for issuing and state registration of the issue of Russian depositary receipts, requirements for documents issued during the issue);

— regulation on disclosure of information by issuers of emissive securities, approved by the Order of the FFMS of Russia No. 06-117/pz-n dated October 10, 2006 (regulates the composition, procedure and terms of mandatory disclosure of information by issuers of Russian depositary receipts);

— regulation on activities for organizing trading in the securities market, approved by the Order of the Federal Financial Markets Service of Russia dated 09.10.2007 No. 07-102/pz-n (governs the procedure for public circulation of Russian depositary receipts at stock exchanges (listing of securities);

— a list of organizations in which Russian depositories can open accounts for recording rights to foreign securities for the purpose of issuing Russian depository receipts, approved by Order No. 07-52/pz-n of the Federal Financial Markets Service of Russia dated April 27, 2007;

— a list of stock exchanges, the inclusion of foreign securities in the quotation lists of which is a prerequisite for the issue of Russian depositary receipts in the event that the issuer of foreign securities does not assume obligations to the owners of Russian depositary receipts (approved by Order No. 07-51/pz-n);

— equity capital adequacy ratios for professional participants in the securities market, as well as management companies of mutual investment funds and non-state pension funds, approved by Order of the Federal Financial Markets Service of Russia dated April 24, 2007 No. 07-50/pz-n.

REFERENCE

The most well-known types of depositary receipts are American Depositary Receipts (ADRs), European Depository Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs are issued for circulation in the US markets, EDRs - only for circulation in the markets of Western Europe (mainly in London and Luxembourg), GDRs can be circulated both in European markets and in the USA.

GDRs are placed outside the country of the issuing company in the markets of two or more countries.

The definition of a Russian depositary receipt is introduced by Art. 2 of the Law on the Securities Market.

A Russian depository receipt (RDR) is a registered non-documentary issued security, which:

- has no nominal value;

— certifies the ownership of a certain number of shares or bonds of a foreign issuer (represented securities);

- establishes the right of its owner to demand from the RDR issuer to receive in exchange for the RDR the corresponding number of underlying securities and to provide services related to the exercise by the RDR owner of the rights secured by the underlying securities.

So, RDR is a security, the underlying asset of which is the securities of a foreign issuer. At the same time, RDRs of one issue can certify the ownership of the underlying securities of only one foreign issuer and only one of their types (categories, types).

The rights secured by the represented securities, including those related to the receipt of income on them, are exercised in favor of RDR holders who are such as of the date of compiling the list of holders of the underlying securities and who have the relevant rights, including to receive income from securities and other due payment owners. Payments to RDR holders are made by the RDR issuer in the currency of the Russian Federation, unless otherwise stipulated by the decision to issue RDRs. The period of fulfillment of obligations related to the implementation of these payments may not exceed five days from the date of receipt by the depository of the relevant payments from the issuer of the underlying securities.

In order to protect investors from the risk of bankruptcy of an RDR issuer, the Law on the Securities Market provides that in the event that a depositor is provided with services related to the receipt of income on securities and other payments due to the owners, the funds of the depositors must be kept in a separate bank account opened by a depository in a credit institution (special depositary account).

Features of the circulation of RDR

RDR has a number of features compared to other types of securities existing in Russia:

— the report on the results of the RDR issue is not registered;

— there is no requirement to complete the placement of RDRs within one year from the date of state registration of their issue;

- circulation of RDRs can be carried out after the state registration of their issue;

— RDR is redeemed upon issuance of the securities certified by it to the owner of the RDR;

- with the redemption of RDRs, the maximum number of depositary receipts that can be simultaneously in circulation in accordance with the decision to issue RDRs does not change;

— the RDR registry can be maintained by their issuer — the Russian depository, regardless of the number of RDR holders.

An RDR issuer can only be a depository:

— created in accordance with the legislation of the Russian Federation;

— meeting the requirements for the amount of equity capital (not less than 200 million rubles of own funds) established by the federal executive body for the securities market;

– carrying out depositary activities for at least three years.

There are two types of DDR release programs - "Sponsored" and "Unsponsored".

When issuing sponsored securities, an agreement is concluded between the issuer of the underlying asset and the Russian depository - the issuer of RDRs, according to which the issuer of the underlying securities assumes obligations to the holders of the RDRs. In this case, the RDR also certifies the right of its owner to demand the proper performance of these duties.

When issuing unsponsored securities, the underlying securities issuer assumes no liability to RDR holders. In this case, the issue of RDRs is possible only if the underlying securities are included in the quotation lists of foreign stock exchanges, the list of which is approved by the federal executive body.

If the issuer of the underlying securities (foreign issuer) assumes obligations to RDR holders, then the depositary receipt also certifies the right of its holder to demand proper fulfillment of these obligations.

The obligations of the issuer of underlying securities to RDR holders must be stipulated by the agreement between him and the RDR issuer. The necessary terms of the contract are:

— an indication of the rights secured by the underlying securities;

— the obligation of the depository to ensure that the number of RDRs in circulation corresponds to the number of represented securities, the rights to which are recorded on the account opened to him as a person acting in the interests of other persons;

— an indication that the represented securities are issued for the placement of RDRs and (or) are in circulation;

— the procedure for the issuance (sending) by RDR holders of instructions to the depositary on the procedure for voting on shares and the obligation of the depositary to ensure the exercise of the right to vote on shares of a foreign issuer (represented securities) only in accordance with the instructions of RDR holders, as well as to present voting results to RDR holders;

— the obligation of the issuer of underlying securities to provide information in Russian to the extent and within the timeframe that enables the depository to disclose it to the extent, in the manner and within the timeframe stipulated by the legislation of the Russian Federation;

— the depositary's obligation to disclose information received from the issuer of underlying securities no later than the day following the day of its receipt;

- an agreement on the application to relations arising from this agreement of the law of the Russian Federation;

— an agreement on the consideration of disputes arising from non-fulfillment or improper fulfillment of obligations under the contract, in the territory of the Russian Federation by courts, the decisions of which can be recognized in the territory of the issuer's country in accordance with an international treaty of the Russian Federation;

— a provision on the liability of the depositary and the issuer of underlying securities for non-fulfillment or improper fulfillment of their obligations under the agreement to RDR holders;

— a provision that the contract cannot be terminated without the consent of the owners of the RDR.

From the date following the date of state registration of the RDR issue, their issuer has an obligation to disclose information. There are differences between sponsored and non-sponsored RDRs in terms of disclosure by the RDR issuer. When sponsored RDRs are issued, the issuer is required to disclose information received from the issuer of the underlying securities. When issuing unsponsored RDRs, the RDR issuer is required to disclose information that is disclosed under foreign law by the issuer of underlying securities on a foreign stock exchange to foreign investors.

The RDR issuer is required to disclose the financial statements of the underlying securities issuer prepared in accordance with IFRS or US GAAP. If an RDR prospectus is registered, the issuer of the RDR is required to disclose information about the issuer of underlying securities and underlying securities in the form of a quarterly report and statements of material facts.

The RDR issue, unlike the standard issue of securities of Russian issuers, which consists of five stages, includes only three:

— approval of the decision to issue Russian depositary receipts by the authorized body of their issuer-depository;

— state registration of the RDR issue;

- direct placement of RDR.

REFERENCE

Depositary receipts (DRs) were invented in 1927 by the financial company Morgan Garanty and were intended to facilitate the public offering on the American securities market of the famous British supermarket Selfridge. The financial crisis of 1929 and the Great Depression slowed down the development of the DR market for a long time.

A real boom in the early 1990s. was associated with a massive entry into the American and European markets of companies-issuers from the countries of Southeast Asia, Australia and a number of Latin American countries.

At the end of 2008, the volume of DR trading in the world exceeded $4.4 trillion, which became a historical record. At the end of 2009, this volume fell to $2.7 trillion, according to the annual report of the Bank of New York Mellon (BoNY Mellon), one of the world's major depositories. According to the same source, in general, last year $32 billion was attracted through the issuance of depository receipts, which is 122% higher than the volume recorded in 2008 - $14.4 billion.

Issuers from countries with developing economies (emerging markets) continue to dominate the global markets for American and global depositary receipts for shares, analysts at BoNY Mellon report. Based on the results of 2009, OAO Gazprom became the leader in terms of the volume of transactions with DR for shares in the region of Eastern Europe, the Middle East and Africa (EEMEA) (about $66 billion). The top five in terms of trading activity also included the Russian OAO LUKOIL and OAO Rosneft.

Thus, the issue of RDRs is carried out without making a decision on their placement, submitting to the FFMS of Russia a report on the results of the issuance of RDRs and its state registration, as well as without submitting to the FFMS of Russia a notification on the results of the issuance of RDRs.

Placement and circulation of RDRs can be carried out after the state registration of their issue, and placement and circulation of RDRs of an additional issue - after registration of changes made to the decision to issue RDRs. Thus, there is no state registration of additional RDR issues, and an increase in the maximum number of RDR issues that can be in circulation at the same time is carried out by amending the decision to issue RDRs. Moreover, RDR placement can be carried out by both open and closed subscription.

An important advantage of the RDR issue over the issue of other securities is the absence of the issuer's obligation to complete the placement of securities no later than one year from the date of state registration of their issue.

There are conditions under which an RDR issuer is required to suspend an RDR placement. This happens in case:

— crushing RDR;

— splitting or consolidation of underlying securities;

— changes in the volume and (or) procedure for exercising the rights secured by the underlying securities.

The placement of RDRs is resumed from the moment the registered changes to the decision to issue RDRs come into force.

Market Forecast and Potential RDR Issuers

Now we can definitely say that the way for foreign issuers to the Russian securities market is open by issuing RDRs. The legal basis for this has been created at the legislative level, the circulation of the first RDRs has begun on Russian exchanges. What's next? Who is interested in bringing their securities to the Russian stock market, who are they, potential issuers?

Specialists primarily name the CIS countries where the capital market is less developed, where companies are interested in raising capital from the Russian stock market at a lower cost (compared to the American and European markets). According to experts, companies from such countries as Ukraine, Kazakhstan, Belarus, etc. may prefer the Russian securities market.

The second group includes companies from non-CIS countries that have strategic plans to enter the Russian market, as well as companies that have placed their shares outside of Russia, but own assets in Russia, and therefore rely on the interest of Russian investors. This also partially includes companies that have placed their shares in the markets of England (LSE), Germany (Deutsche Borse), etc.

In recent years, a third group of companies has been formed - potential RDR issuers. These are holdings registered in offshore zones that have conducted an IPO (Initial Public Offering - an initial public offering of a company's shares for sale to a wide range of persons) abroad and own 75-100% of all their assets in Russia.

Accounting for operations with depositary receipts

At present, accounting for operations with depository receipts is not established by the regulations of the Bank of Russia. In this regard, the following options for accounting for acquired DR are possible.

Option 1. Due to the fact that depositary receipts are issued as an independent type of emissive securities, and also have their own properties and registration number (ISIN), they are accounted on the balance sheet as independent securities. Thus, depositary receipts are subject to accounting depending on their type and qualification on accounts 50104-50110, 50205-50211, 50305-50311 "Investments in debt obligations" and on accounts 50605-50608, 50705-50708 "Investments in equity securities" .

Option 2. Due to the fact that DRs certify the right to a certain number of shares or bonds, and also allow the exercise of part of the rights of the owner of these shares or bonds (voting, income / dividends), they are accounted for on the balance sheet as investments in shares or bonds (but with with your registration number or ISIN). Thus, depositary receipts are subject to accounting on the same accounts as in option 1, only as shares or bonds directly.

Option 2 is more convenient due to the fact that, firstly, the question of the accounting currency of the DR is immediately removed (recall that the DR has no face value). Secondly, the issue of determining the current fair value of DRs is easier to resolve, since it is automatically equated to the price of the underlying shares or bonds. Thirdly, it is clearer to fill out reporting forms (for example, f. 0409116 “Information on securities acquired by a credit institution”). However, from an economic point of view, DRs are still not shares and bonds, but are derivative financial instruments, in addition, the form of the paper is indicated in the same reporting forms (in particular, “depositary receipt”), foreign DRs carry currency risk and etc. In view of the foregoing, option 1 seems to be more correct, while the bank’s accounting policy should stipulate that the DR is accounted for in the currency of the country in which the receipt was issued, and the procedure for determining the current (fair) value (if the DR is accounted for in securities accounts) is established. securities at fair value through profit or loss).

Even more confusing is the issue of accounting for RDRs issued. In terms of accounts in sec. 5 does not provide for accounts for accounting for issued DRs, and therefore, apparently, it is advisable to record issued RDRs on separate personal accounts of balance sheet account 47422 “Other operations liabilities” in the context of issues (registration numbers) of RDRs.

The selected accounting option must be fixed in the bank's accounting policy.

The RDR issue is accounted for by the following entries.

Acquisition by the depositary bank of shares or bonds underlying the RDR:

Dt 501-503 "Investments in debt securities", 506, 507 "Investments in equity securities"

CT cash account - for the amount of purchased securities.

Crediting of shares (bonds) to the depositary account of the issuing bank DR:

Dt 98010 "Securities in custody in the leading depository (NOSTRO depot basic)"

Кт 98050 "Securities belonging to the depository" - for the number of shares (bonds) received.

RDR issue:

Kt 47422 "Liabilities on other operations", "RDRs issued" - for the value of RDRs issued.

Getting paid for issuing sponsored RDRs:

Dt cash account

Kt 70601 (13201) "Income from operations with issued securities" - in the amount of the fee for the issuance of RDRs.

During RDR service:

Receipt of interest, coupons, dividends on securities underlying the RDR:

Dt cash account

Kt 47422 "Liabilities on other transactions", "Settlements on interest, coupons, dividends" - for the amount of interest, coupons, dividends.

Transfer of interest, coupons, dividends on securities underlying the RDR:

Dt 47422 "Obligations on other operations", "Calculations on interest, coupons, dividends"

CT accounts for cash accounting, settlement accounts - for the amount of interest, coupons, dividends.

Issued RDRs are repaid by the issuance of underlying shares or bonds in their place:

Dt 47422 "Liabilities on other transactions", "Issued RDRs"

Kt 501-503 "Investments in debt securities", 506, 507 "Investments in equity securities".

The operation is accompanied by the write-off of the issued shares or bonds from the depositary account.

Accounting for investments in RDRs is carried out in accordance with the procedure established for the purchase of securities by Appendix 11 to Bank of Russia Regulation No. 302-P dated March 26, 2007, and in accordance with the above principles.

Accounting for investments in RDR:

Dt 50605, 50705 "Investments in equity securities of credit institutions" (option 1)

Dt 50608, 50708 "Investments in equity securities of other non-residents" (option 2)

CT cash account - for the amount of investments in the RDR.

The nominal value of investments is rubles (option 1) or currency (option 2).

Since the accounting procedure for operations with Russian depositary receipts is not regulated, before carrying out such operations, banks should make appropriate requests to the local territorial authorities of the Bank of Russia and national banks.

1 - Issue of Russian depository receipts (RDRs). Brief guide for issuing companies. JSC "RTS Stock Exchange".

2 - Ibid.

L.M. Urskova, OJSC Bank Russian Financial Corporation, Head of Financial and Investment Consulting Department
V.B. Potekhin, OJSC Russian Bank for Development, Chief Accountant, Chairman of the Taxation, Accounting and Reporting Committee of the Association of Russian Banks

Features and prospects of Russian depository receipts

Let us consider in more detail what depositary receipts are in general and Russian depositary receipts in particular.

Basic terms

When describing the procedure for issuing and circulation of Russian depository receipts, the following terminology will be used:

— the issuer of represented securities is a legal entity established in accordance with foreign law;

— RDR registrar — RDR depositary issuer or registrar — a specialized organization that maintains the register on the basis of the issuer's instruction;

— Russian Stock Exchange — a stock exchange on the territory of the Russian Federation that admits RDRs to trading with/without going through the listing procedure.

The RDR release infrastructure can be represented as the following diagram 1:

Scheme. RDR 2 Release Infrastructure

Regulation of the rights of RDR holders

The regulatory legal framework for Russian depositary receipts consists of the following documents:

REFERENCE
The most well-known types of depositary receipts are American Depositary Receipts (ADRs), European Depository Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs are issued for circulation in the US markets, EDRs - only for circulation in the markets of Western Europe (mainly in London and Luxembourg), GDRs can be circulated both in European markets and in the USA.
GDRs are placed outside the country of the issuing company in the markets of two or more countries.

The definition of a Russian depositary receipt is introduced by Art. 2 of the Law on the Securities Market.

A Russian depository receipt (RDR) is a registered non-documentary issued security, which:

- has no nominal value;

— certifies the ownership of a certain number of shares or bonds of a foreign issuer (represented securities);

Features of the circulation of RDR