The European Union has prohibited its individuals and legal entities from participating in a Russian-proposed investor-to-investor asset swap scheme, which includes the National Settlement Depository (NSD) in the transaction. This decision follows the European Commission’s publication of an explanatory note on Wednesday addressing the sanctions imposed in response to Russia's military invasion of Ukraine.

The note stated no funds or economic resources, either directly or indirectly, could be provided to the National Settlement Depository and underscored the European Commission’s firm stance on the matter.The NSD, already under European sanctions for two years, was subjected to additional blocking restrictions by the United States on June 12, 2024. Prior to this, the European Commission had not officially commented on the participation of EU representatives in asset exchanges with Russia.

The asset swap scheme, scheduled for August 12, 2024, would permit Russian investors to exchange Western securities currently held in NSD accounts with EU securities depositories. The Investment Chamber, Russia’s largest brokerage, is organizing the exchange. According to the brokerage, Russian investors are offering securities worth 35 billion rubles in exchange for blocked assets.