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JPMorgan allows clients to cancel depositary receipts in Russian companies- sources -Breaking

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© Reuters. FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/File Photo

Sinead cruise and Carolina Mandl

NEW YORK (Reuters) – JPMorgan (NYSE:) & Chase on Tuesday started to allow holders of depositary receipts in Russian companies to cancel them, two sources familiar with the matter said, giving some investors a way to liquidate what have largely been frozen holdings.

This is after LSE, the London Stock Exchange (LSE), stopped trading in Russian depositary receipts about a month ago due to prices plummeting because of a series of Western sanctions placed on Russia following its invasion of Ukraine.

The bank will issue depositary receipts, which are certificates that can be used to represent shares in foreign corporations traded on a local stock market.

Sources did not wish to be identified as the information was classified as confidential.

Refinitiv reports that JPMorgan, Russia’s biggest lender, issued a small number of depositary receipts to Russian companies that are listed on the LSE. These include Rosneft and oil major Rosneft.

Depositary receipt holders can cancel the receipts, although issuers were unable to do so after Russian central banks banned the transfer of local Russian shares. The restrictions have been lifted and issuers may reopen cancellations.

JPMorgan, the second depositary receipt issuer, has reopened cancellations. It follows BNY Mellon’s (NYSE:), which offered clients the option of withdrawing from receipts and receiving in return the Moscow underlying shares for a fee.

Maxim Reshetnikov, the Economy Minister, said last week that Russia was considering requiring Russian depositary receipts traded overseas to be returned to their home market.

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