What will happen to the frozen trust management accounts of Alfa-Bank (Belarus)
Western brokers were frozen because of the settlement of the account of Alfa-Bank (Belarus) for trust management (DU). Bank representatives report that this happened due to the sanctions restrictions of the UK and the EU. Today Alfa-Bank answered on the main issues related to remote control – how to return funds, terminate the contract, in order to make a commission, when it will be possible to make a transaction on the Moscow Exchange and others.
Why was the funds not returned if the refund was sent before March 25?
— The process of returning money from trust management consists of three groups:
- sale of securities;
- return of money from the broker;
- crediting to the client’s account in the bank’s internal accounting system.
If the first and second stages are completed, then the third stage ends by default.
Until March 24, we were waiting for payments from brokers. After receiving a guarantee to freeze the investment account, it became clear that there would be no inflow of funds in the near future, and we are taking advantage of the suspension of the return of money from DU.
Broker that the investor’s assets are frozen?
— Investment accounts with brokers are opened in the name of Alfa-Bank, therefore bank number. The format does not imply the presence of an official document – usually just an email arrives.
Relatively severe consequences for violators of the sanctions regime (in the UK – up to 7 years in prison plus a fine of 50% of the size of the height), as well as a relatively “low threshold” of grounds for blocking (there is enough “suspicion that the traffic transaction is carried out in favor of sanctioned persons or organizations”) leads to the fact that it is easier for counterparties to freeze assets and pass on to us the possibility that securities and money should not be blocked.
The negotiation process with a broker just begins with a request for a document with the inclusion of formal grounds for blocking an account. We sent such requests to contractors.
Is it possible to terminate the contract and receive the assets after 60 days in accordance with clause 12.3 of the General Conditions (TC) of the DU contract?
– Clause 12.3 the conditional situation is due to the fact that if the action of the force majeure lasts more than 60 calendar days, then each party from what is happening will terminate the trust meeting. However, according to clause 6.3.2. The Trustee GC does not implement a unilateral waiver of the implementation of a trust accident in cases where the trustee may not perform transactions and / or exceptions with the Assets – in accordance with clause 5.2.1 of the GC.
That is, the operation of paragraph 12.3 of the TC in unlimited cases, when the trustee effect does not occur with the assets of the action and / or a violation in paragraph with paragraph 5.2.1 of the General Conditions.
Also, clause 12.3 of the GTC does not provide for excessive consumption / termination of the contract at the request of the client. According to clause 12.3, the client is subject to termination of the contract, and the termination itself occurs in any case by agreement of the parties.
Regardless of this termination of the trust amount, no achievements or changes in the obligations involved in the trust transaction before the date of such termination can be attracted, especially taking into account the fact that all acquired securities are the property of the trustor. The bank refunds the client’s funds from the DU, and such a refund will necessarily be carried out after the coverage preventing the refund.
Thus, the termination of the contract will not accelerate the return of funds and / or the sale of securities, without which such a return is impossible.
Is it unlikely that it is legal to introduce clause 5.2.1 into the contract?
– The possibility of changing the contract is provided for in clause 1.2 of the OU.
In essence, clause 5.2.1 clarifies and discloses the likelihood of a risk that causes an objective impossibility of trust management in front of the probability by the trustee for any actions, inactions or exclusions of the party of the exception, as well as for any losses incurred by the trustor as a result of the actions, inactions or exclusions of the majority, unless such significant ones are significant willful misconduct or gross negligence, or trust fraud.
Can I transfer assets to another broker?
– The activity of one client can be transferred to another broker.
In terms of the estimated trust value of the entrusted property transferred to the media. Those. the client transfers to the bank and receives back the money.
Securities within the framework of the remote control can only be placed on the account of Alfa-Bank, remote control with one broker on the account of Alfa-Bank, remote control with another broker.
In the current conditions, even if we ignore the instructions, the transfer is impossible above the technical level – investment accounts are blocked.
At the same time, we are currently working on unlocking and subsequent transfer of all frozen client assets to other brokers.
Why is a commission needed if services are not provided?
— Freezing of accounts does not cancel the fact of holding client securities. The papers were not confiscated and are still protected.
Dividends are received on them, coupon income is accrued. Securities are based on corporate events. Also, brokers continue to charge a depositary commission from the bank (detention of securities).
Besides, bank withdrawal, which will allow you to make a transaction with securities after they are unlocked. These are monthly payments that are not covered by the fact of asset closure.
We are currently working with brokers and counterparties to reduce or eliminate fees and charges. We will let you know as soon as new information becomes available.
When will it be possible to carry out an operation on the Moscow Exchange?
– The broker requires confirmation that Alfa-Bank in Belarus was found to be residents of the Russian Federation in order to resume access to the Moscow Exchange. Alfa’s lawyers are now solving this issue with the broker.
We are counting on a positive result in the near future – we will publish all the news on our tg-channel alphathrust.