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. Last Updated: 07/27/2016

Unexim Wins U.S. Depository Approval

Uneximbank announced Tuesday it has become the first Russian bank to win U.S. approval to act as a foreign depository for American investors in the Russian securities market.


The approval from the U.S. Securities and Exchange Commission should help open the way for more access by American investors to the market in lucrative Russian treasury bills.


"This should help facilitate access of American companies to the Russian T-bill market ... and increase their direct investment in Russian companies," said Mikhail Alexeyev, deputy chairman of Unexim's board and director of the project. "This is an important international recognition for us. It puts us on the same level as other prominent international banks," he added.


Through Uneximbank, American investors will be able to buy T-bills and hold them in custody in conformity with U.S. regulations. Although U.S. approval for Uneximbank to become a foreign custodian should attract new investors, many potential investors are likely to remain hesitant because of strict rules and limitations on foreign ownership and exchange operations.


Under current rules. no more than 10 percent of any T-bill issues can be sold to foreigners and dividends cannot be converted to foreign currency for repatriation.


With regard to shares in Russian companies, Credit Suisse and Chase Manhattan branches in Moscow were the only banks with SEC approval to act as custodians for American investors, Alexeyev said.


"There has been a lot of interest on the part of American investors to gain access to Russian securities," said Steven Robinson, a lawyer for the firm Cleary, Gotlieb, Steen and Hamilton, which handled Uneximbank's request to the SEC. "Uneximbank is considered one of Russia's most serious banks. American investors will feel more comfortable dealing with a Russian bank than a foreign one since the Russian securities market is more its own backyard."


Uneximbank met SEC criteria requiring a minimum of $200 million in shareholder capital -- a requirement Alexeyev said some other leading Russian banks also should be able to meet in the near future.


"Our motivation is to develop a new direction in our business and to open the doors to other activities, such as asset management," he said.