The Moscow Court of Arbitration has received several statements of claim from Russian companies for damages. Central Securities Depository JSC (hereinafter - the Central Securities Depository) has been involved in court proceedings as co-defendant.

The Central Securities Depository believes that its involvement as a co-defendant in these court proceedings is not justified. Records of foreign securities are kept in an international securities depository.

The Central Securities Depository, within the framework of contractual relations, performs functions of one of the intermediaries for recording and registration of transactions with foreign securities and conveys restrictions and prohibitions imposed by global custodians and depositories to its participants.

The Central Securities Depository is unable to (1) register transactions if restrictions are imposed on such transactions at a higher level and (2) distribute yields if these yields are not transferred to accounts of the Central Securities Depository in global custodians and depositories or if these funds are blocked at the level of a higher recordkeeping organization.

The Central Securities Depository has been conducting legal proceedings on the given issue since November 2023 and has already expressed objections to litigation of these disputes in the Moscow Court of Arbitration.

A number of international agreements and conventions are in force between the Republic of Kazakhstan and the Russian Federation, including the Convention on Legal Aid and Legal Relations in Civil, Family and Criminal Cases. In accordance with those international instruments, lawsuits against legal entities are brought to courts of the state in which the governing body of legal entity is located. In other words, such claims should be reviewed by Kazakhstan courts at the location of the Central Securities Depository. 

The Central Securities Depository monitors continuously limitations, prohibitions and risks associated with sanction restrictions applied by global custodians and depositories and notifies its clients of such changes promptly.