European Council Tells Securities Depositories With Russian Bank Money to Separate Profits

The European Council on Feb. 12 told central securities depositories that hold more than $1.07 million in assets from the Central Bank of Russia that they "must account [for] extraordinary cash balances accumulating due to EU restrictive measures separately." The depositories also must keep the related revenues separate, the council said, adding that the depositories are barred from "disposing of the ensuing net profits."

The central securities depositories also may request their supervisory authority to release a share of those net profits "in view of complying with statutory capital and risk management requirements," the council said. This may lead the council to decide on possibly establishing a financial contribution to the EU budget from these net profits to support Ukraine through its recovery.

The council said nearly $280 billion has been frozen from the Russian Central Bank, with over two-thirds of that held in the EU.