Depository receipts (ADRs / GDRs)

Conversion of Depositary Receipts (DRs) into Russian shares.

Key Advantages of Our DR Practice

The forced conversion of depositary receipts requires not only legal analysis, but also coordinated execution across registrars, custodians, notaries and cross-border document flows. Our practice is structured to address these challenges in a comprehensive and operationally efficient manner.

Proven Forced Conversion Track Record

We have completed numerous forced conversion and share allocation procedures involving major Russian issuers, including EVRAZ, HeadHunter, VK (VKontakte), Tinkoff and other DR programs – maintaining a 100% completion record in the matters undertaken.

Our experience also covers standard and forced conversions and related procedures concerning Gazprom, Lukoil, Tatneft, Aeroflot and additional publicly traded issuers – in total, more than 20 issuers.

Dedicated Cross-Border Team

Our DR matters are handled by a team of approximately 10 lawyers operating across three jurisdictions. This structure enables extended working coverage and, where required, near 24/7 responsiveness in urgent cases.

International Cooperation and European Partner Firms

For more than four years, we have worked in close cooperation with selected partner law firms in several European jurisdictions. Where required, we are able to structure mandates through and/or together with these firms, ensuring compliance with local regulatory and professional requirements.

Operational Logistics via Serbian Desk

Our permanent operational desk in Serbia allows us to streamline document routing for international clients. In many cases, documentation may be prepared, notarised and forwarded within approximately five business days, subject to client readiness and applicable requirements.

Specialised Notarial Infrastructure

We cooperate with experienced notaries who are familiar with capital markets documentation, depositary receipt conversions and the specific technical requirements of Russian registrars and issuers. This significantly reduces the risk of formal rejections and procedural delays.

Rapid Translation Support

We work with professional translators accustomed to capital markets documentation, enabling urgent certified translations to be delivered within approximately two business days where required.

Professional Community Engagement

MAGENTA Legal is a member of the European Association for Holders of CIS Securities (EAHCISS). This allows us to remain engaged with the professional community representing cross-border investors and to exchange practical experience relating to DR conversions and related regulatory developments.

Professional Recognition

MAGENTA Legal has been recognised by leading Russian legal rankings, including Pravo 300, Rossiyskaya Gazeta and Kommersant, in relevant practice areas.

Frequently Asked Questions (FAQ)

Based on our extensive experience in forced conversion matters, we have compiled answers to the questions most frequently raised by holders of ADRs and GDRs.

What forced conversion procedures are currently active?

As of mid-February 2026, active forced conversion procedures remain available in relation to the depositary receipt programs of Ozon and CIAN.

These procedures are connected with the redomiciliation of the respective issuers, whereby the companies transferred their place of incorporation to the Russian Federation. Such redomiciliation enabled the implementation of statutory forced conversion mechanisms under Russian law, allowing eligible holders of depositary receipts to convert them into shares of the Russian companies.

At the same time, a number of previously available forced conversion procedures have already been completed and are currently closed. These include procedures relating to Tinkoff, HeadHunter and VK (VKontakte), as well as the allocation of shares in connection with the EVRAZ restructuring.

While regulatory developments remain dynamic, the reopening of completed procedures is generally not anticipated under the current framework.

What about depositary receipts of Gazprom, Lukoil, Sberbank and other major issuers?

The forced conversion procedures relating to a number of major Russian issuers – including Gazprom, Lukoil, Sberbank and others – were implemented in 2022. Those procedures have since been completed.

We have on multiple occasions addressed legislative authorities and the Central Bank of the Russian Federation with proposals to consider reopening or repeating similar mechanisms. As of mid-February 2026, no such renewed procedures have been introduced, and the likelihood of their reinstatement under the current regulatory framework appears limited.

In parallel, during 2023–2024 certain issuers facilitated so-called standard (voluntary) conversion procedures through foreign custody infrastructure. These were typically available only within very short conversion windows opened by the relevant depositaries or brokers.

Since 2025, for the vast majority of DR programs, such voluntary conversion options have effectively ceased to operate. At present, there is no publicly available information indicating the reopening of such windows.

At the same time, investors are strongly advised to monitor issuer-specific developments and to verify the status of their particular holdings with their broker or custodian. In isolated cases, market participants have reported that conversion possibilities may still exist for certain programs (e.g. O’KEY (ISIN US6708662019, ISIN US6708661029) depositary receipts).

What is the legal status of the converted shares and dividends?

The legal regime applicable to converted shares and related dividend payments depends primarily on the status of the holder under Russian law.

Russian regulations distinguish between persons from so-called “unfriendly” jurisdictions and other persons. The relevant list of jurisdictions is approved by the Government of the Russian Federation and currently includes, inter alia, all EU Member States, the United States, the United Kingdom (including its overseas territories, such as the British Virgin Islands) and a number of other jurisdictions.

As a general rule:

• Individuals holding citizenship of a listed jurisdiction are treated as persons from an “unfriendly” jurisdiction.
• Legal entities incorporated in such jurisdictions, or controlled by persons from such jurisdictions, are treated accordingly.
• If an individual holds both a passport of a listed jurisdiction and a passport of another jurisdiction, the “unfriendly” status will generally prevail.
• If an individual holds Russian citizenship, he or she is treated as a Russian citizen for the purposes of these regulations, regardless of additional citizenship.

In addition to jurisdictional status, the applicable regime may also depend on the date and source of acquisition of the securities.

Given the complexity of these criteria, individual legal assessment is strongly recommended.

What can I do with the converted shares?

For holders treated as persons from “unfriendly” jurisdictions, sale, purchase and other transactions involving the converted shares are generally subject to prior approval by the Government Commission for Control over Foreign Investments in the Russian Federation.

Obtaining such approval is possible in certain cases but remains procedurally complex and time-consuming.

In addition, transactions involving shares of companies operating in the oil, gas and certain strategic sectors may require separate approval at the presidential level under applicable regulations.

As a result, practical disposal options for such shares are significantly restricted unless the required approvals are obtained.

Where can dividends be paid?

For holders subject to the restrictive regime, dividends are typically credited to a special type “C” bank account opened with a Russian bank that holds the converted shares.

A “C” type account is generally opened automatically upon the first dividend accrual. However, funds credited to such accounts are subject to statutory restrictions.

If dividends were declared prior to the conversion of depositary receipts, they may need to be claimed separately. In such cases:

• the claiming procedure varies depending on the issuer and share type;
• the general limitation period is three years from the date of the general meeting approving the dividend distribution;
• for many issuers (including Lukoil, Rosneft, Tatneft and others), this period commenced in 2022;
• the claiming process typically requires three to six months.

Investors should therefore assess potential dividend claims without delay, particularly where statutory limitation periods may expire.

Can the dividends be invested?

The use of funds (including dividends) on the "C" type account is strictly limited – the client is able to perform only a few operations, such as payment of Russian taxes and duties.

“Type S” or “Type C” – what do we call the Russian special account opened for non-resident investors?

Russian legislation labels this account as «счёт типа “С”» – the Cyrillic letter «С», pronounced like the English “S”. In English-language practice the same account is written as Type C account (or C-type account) because the Latin C looks identical to the Cyrillic «С» and avoids confusion with the letter S.On our website we therefore use Type C account, occasionally adding a note that this is the very account referred to in Russian law as «счёт типа “С”». The difference is purely a matter of transliteration – one concept, two alphabets.

The information provided above is for general guidance only and does not constitute legal or financial advice. MAGENTA Legal accepts no liability for any actions (or inactions) based on the information provided. Please consult with your legal and/or financial advisor.

Check out our Telegram channel for more useful articles and the latest news.