Trade Locally
Since the creation of MOEX in 2012 the preferred choice for international investors is now to trade locally. Over 80% of trading in dual listed stocks takes place on the home market ie MOEX due to the better liquidity it offers and the lower cost of long-term ownership of shares. As well as that there are over 250 of stocks solely listed on MOEX so trading locally provides investors with greater choice.
All the infrastructural and legislative changes have significantly increased the level of accessibility to the Russian market for the international investor.
Key points for choosing local shares on MOEX over Depository Receipts:
- Significant long-term cost benefits in holding local securities over DRs due to exorbitant Depository Bank charges
- Receive the dividend immediately rather than waiting an additional week to receive it from the Depository Bank
- Control your own FX conversions rather than taking the rate Depository Banks give you.
- Accessing Russian market has never been so convenient
- No restrictions on investments in local securities
- No approval is required to start investing
- Ability to hold and settle shares in Euroclear and Clearstream
- USD DVP and RUB DVP supported by all the major custodians
- No restrictions on RUB currency
- Up-to-date infrastructure and T+2 settlement cycle
International Sales Team Contacts:
A wide range of Global Banks and Brokers provide high and low touch access to the Moscow Exchange.
Here is the list of Electronic Access providers
- MOEX-listed Shares Superiority is based on the following criteria
- Deeper liquidity
MOEX-listed equities have outperformed depository receipts listed on the LSE:
- Cheap and transparent ownership
Investor can use the same infrastructure for settling and safekeeping Local Equities and Depository Receipts while Local Equities remain more transparent:
Fees to be paid to depositary bank for some of DR programs of Russian companies :
1 Service fees are charged annually, in arbitrary date. Calculated based on number of DR on client account on the record date
2 Dividend fees are charged when dividends are paid
3 As % of gross dividend
4 Calculations based on Thomson Reuters data as of June 2015
5 Depositary service fee which is applicable for 0%, 5%, 10% withholding tax rates
Source: BNY Mellon, Deutsche Bank, JP Morgan, Citi, Thomson Reuters
- More protective for the shareholder:
| riterion |
Local Shares |
Depositary receipts |
| Shareholder Rights |
Full shareholders' rights (in accordance with the law on joint stock companies), including:
- Receipt of commission-free dividends
- Voting at annual shareholders meeting
- Preemption right for purchasing new shares
- Nomination of a candidate for the Board (for more than 2% shareholders)
- Adding items to the agenda of the annual shareholders meeting (for more than 2% shareholders)
- Extraordinary shareholders meeting convocation (for more than 10% shareholders)
|
- Receipt of dividends and voting
allowance at annual shareholders
meeting through depositary bank
with the according restrictions
|
| Dividend Payments |
|
- Time of dividend payments
is 3+ days longer comparing to local shares
|
| Taxation Issues |
|
- Currently the transaction of converting
local shares to depositary receipts
and vice versa may be considered
as the sale of securities for taxation purposes
(subject to the capital gain tax)
|
