Law360, London (April 19, 2022, 1:53 PM BST) -- Moscow has brought in a new law forcing all Russian companies to remove their shares from foreign stock exchanges, as the country continues to build a wall between itself and Western financial markets after the invasion of Ukraine.

President Vladimir Putin signed a series of legal amendments on Saturday requiring depositary receipts of Russian companies to be withdrawn by April 26, although companies may be able to request extensions. The receipts are tradable security certificates issued by a domestic depositary bank representing shares in a foreign company, allowing stock in that business to be traded on a local stock exchange.

Putin's bill also prohibits Russian companies from registering depositary receipts on foreign exchanges, according to the act posted on the government's legislation website.

Russian companies were given five working days to end agreements with the foreign bourses where their depositary receipts are traded. They will also be required to tell the Russian central bank about the termination of these agreements and supply supporting documents.

Holders of the receipts will have an opportunity to convert the receipts into shares to trade on Russian exchanges once repatriated from foreign listings.

The London Stock Exchange suspended trading of stock in Russian investment bank VTB on Feb. 25 after the first raft of financial sanctions were imposed by Western governments — shutting the bank's British subsidiary, VTB Capital, out of the City's financial system. The London Stock Exchange Group suspended the trading of all Russian depositary receipts, affecting the securities of 27 of the country's companies.

The Kremlin warned at the beginning of April that Russian companies were "obliged to return" depositary receipts traded on foreign stock markets so that the securities could be traded in domestic bourses.

The Moscow Stock Exchange opened after a month-long shutdown in late March. But the exchange imposed a ban on short-selling in an attempt to control market volatility. Russia's central bank also said it would keep foreign companies listed on the bourse if they maintained a presence in Russia, even if they were removed from listings on exchanges outside Russia.

Western stock markets and bourses have suspended trading in Russian companies' depositary receipts since the beginning of the Russia-Ukraine war on Feb 24. The New York Stock Exchange and NASDAQ have suspended trading in securities of most Russian companies since Feb 28.

Sanctions have targeted major Russian businesses, lenders and even the Russian Federation's central bank, which is under scrutiny by a European debt group after it made a $650 million payment on dollar eurobonds in rubles.

Additional reporting by Najiyya Budaly. Editing by Ed Harris.

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