Russia is set to stamp out foreign listings for homegrown firms as Putin looks to close ranks in the wake of the invasion of Ukraine.
Legislation signed by Putin over the weekend will force Russian firms to dissolve Global Depository Receipts (GDRs), which have allowed firms to have secondary listings in global financial capitals alongside a primary listing in Moscow.
The new law will see GDRs owned by foreign holders converted to normal shares, Bloomberg reported., but sanctions slapped on Russia following the invasion mean that holders will now be unable to offload the GDRs.
The new law comes after the London-listed GDRs of Russian firms including Sberbank, Rosneft and Gazprom have cratered to record lows in recent weeks as investors looked to sever ties with Russia following the invasion.
The London Stock Exchange stepped in to suspend trading in a number of Russian GDRs in London after they plunged over 90 per cent
Russian energy giant EN+ said it was now mulling its options and had five days to remove its GDRs once the provisions became effective.
“The company is evaluating possible scenarios and seeking necessary advice, including legal,” EN+ said in a statement.
“The company will separately notify the market about sending notices to terminate the deposit agreements.”
The new law ushered in will not impact firms who conducted an initial public offering on a foreign exchange, such as Yandex, which has its primary listing on the Nasdaq in New York.