Russian securities in unfriendly hands: Decree 138 segregation, type C income, the 2024 asset swap and what is left in 2026
A Western fund holding Gazprom shares or a Russian Eurobond in 2026 can neither sell them in Moscow nor receive the income abroad. The rules that produce that result are a layer of four decrees, each with its own date, and one swap mechanism that ran twice and stopped.
Income: everything goes to type C
Dividends on Russian shares and coupons and redemptions on Russian bonds owed to holders connected with unfriendly states are paid under the temporary procedure of Decree No. 95: in roubles, into a type C account opened in the holder's name with a Russian depositary or bank, where they can be used to pay Russian taxes and buy federal bonds and little else without a permit. Since 2022 the Russian depositaries have accumulated such balances on behalf of Euroclear, Clearstream and their underlying clients; the Russian side regards the obligation as discharged, and the holder's recourse is a permit from the Government Commission, granted in individual cases — mostly where the unfreezing is matched on the other side.
Ownership: Decree 138 and segregation
Decree No. 138 of 3 March 2023 addressed the trade that had grown up around blocked securities — buying Russian shares or Eurobonds cheaply from unfriendly holders abroad and bringing them into Russia for sale at domestic prices. Russian securities acquired after 1 March 2022, and Eurobonds and substitute bonds acquired after 3 March 2023, where any person in the chain of holders was connected with an unfriendly state, must be kept in segregated accounting by Russian depositaries and registrars and may not be sold on the organised market or transferred freely; income on them goes to type C accounts. The Bank of Russia's Board decision of 9 December 2025 restated the regime in force from 12 January 2026: transferring depositaries certify the status of securities they move, one certificate may cover a whole transfer, certificates may be exchanged by e-mail, and corporate actions no longer trigger the six-day verification wait. The decision has no retroactive effect, so securities segregated before 2026 stay segregated. The Bank of Russia's running Q&A on the decree was last updated on 24 July 2026.
The practical effect for a Western seller is that a private sale of a blocked Russian security to a Russian or friendly buyer transfers a segregated asset with no domestic liquidity, which is why discounts on such trades remain deep.
The swap that ran twice: Decree 844
Decree No. 844 of 8 November 2023 created the one organised exit so far. Russian retail investors could tender foreign securities blocked in their Russian depositaries — up to RUB 100,000 of initial value per investor — and unfriendly non-residents could buy them, paying with the roubles trapped on their type C accounts, through an operator, Investitsionnaya Palata. The first round closed on 12 August 2024: of RUB 35.3 billion tendered by more than 700,000 Russian investors, foreign buyers took RUB 8.1 billion. A second round in September–October 2024, with the acceptance deadline extended three times to 9 October, added RUB 2.54 billion, for a total of RUB 10.64 billion — about 30% of what was offered. In November 2024 the Ministry of Finance said it was ready to continue and to modify the mechanism, including raising the limits and allowing non-residents to pay with securities rather than only type C cash, but that nothing concrete was being developed “because of the restrictions their own regulators imposed on those investors”. In October 2025 Investitsionnaya Palata said it had received no applications from market participants for a new round and did not plan to act as operator again; individual brokers have since arranged small bilateral exchanges under their own Government Commission permits. As of October 2026 there is no centralised swap, and a Western holder of type C balances cannot count on one.
Bonds: substitution and sovereign replacement
Russian corporate issuers' Eurobonds held through Euroclear stopped paying Russian holders in 2022. Decree No. 430 of 5 July 2022 allowed, and Decree No. 677 of 22 May 2023 required, issuers with Eurobonds outstanding to issue “substitute bonds” on the Russian market with identical terms — initially by 1 January 2024, extended to 1 July 2024 — exchanging them for the Eurobonds of holders whose rights are recorded in Russian depositaries. Decree No. 665 of 9 September 2023 did the same for the sovereign: Russia's own Eurobonds were replaced with rouble-settled substitute federal bonds in December 2024. For an unfriendly holder outside the Russian depositary system, substitution changes nothing directly: the original Eurobond remains in Euroclear, payments on it from the Russian side are made in roubles to a type C account in Russia, and the substitute bond is a domestic instrument it cannot hold. For holders whose position is recorded in Russia, substitute bonds trade on the Moscow Exchange and pay in roubles at the Bank of Russia rate — but a position held through an unfriendly chain is segregated under Decree No. 138.
New money: type “In” accounts
Decree No. 436 of 1 July 2025 opened a separate track for foreign investors willing to bring fresh money. Funds credited to a type “In” account from abroad after that date may be invested in Russian securities and the proceeds — income and sale proceeds alike — freely transferred back abroad (navigator card 2.6), with the one restriction that cash may not be withdrawn from such an account (card 11.9). The regime is deliberately walled off from the pre-2025 stock: existing type C balances cannot be moved into an “In” account, and existing blocked holdings do not qualify. It is an invitation to new investors, including from unfriendly states, rather than a route out for old ones.
What an unfriendly holder can and cannot do, October 2026
| Action | Position | Basis |
|---|---|---|
| Receive dividends / coupons abroad | No — paid in roubles to a type C account in Russia | Decree 95; Decree 138 |
| Sell Russian shares on the Moscow Exchange | No — segregated; off-exchange sale only, with a permit where the buyer is Russian | Decree 138; Decree 81 |
| Use type C balance | Russian taxes, federal bonds, limited other uses; transfer abroad only with a permit | Bank of Russia Board decisions under Decree 95 |
| Participate in an asset swap | No centralised round since October 2024; bilateral broker deals under individual permits | Decree 844 |
| Exchange a Eurobond for a substitute bond | Only if the position is recorded in a Russian depositary | Decrees 430, 677, 665 |
| Invest new money and repatriate | Yes, through a type “In” account | Decree 436 |
Permits remain the only individual route. The Government Commission has granted them for the release of type C balances and the sale of blocked positions where the applicant could show a matching unfreezing of Russian assets abroad; applications without that element have not been granted. The written-opinion service covers the question of whether a specific holding has a realistic route out; most do not, and the honest advice is often to value the position accordingly.