The UK tax authority, HM Revenue and Customs (HMRC), on Tuesday announced plans to revoke the Moscow Stock Exchange’s (MOEX) status as a “recognized stock exchange.” The move is meant to discourage British citizens from investing in Russia.
“As we continue to isolate Russia in response to their illegal war on Ukraine, revoking Moscow Stock Exchange’s recognized status sends a clear message – there is no case for new investments in Russia,” UK Financial Secretary to the Treasury Lucy Frazer said, commenting on the move, as cited in the HMRC press release.
The “recognized stock exchange” status is given by the UK’s tax authority to qualifying stock exchanges and allows securities traded on such stock exchanges certain tax treatments and reliefs. Stripping MOEX of the status means UK investors trading there will not be eligible for these perks in their future investments. However, “access to those treatments and reliefs for existing investments will remain unaffected,” the press release stated.
The move comes as a response to restrictions that the Russian central bank has placed on foreign investors trading on the MOEX, banning brokers from selling assets at the instruction of non-Russian residents. The Russian government took the step to stabilize the country’s financial markets after Western economic sanctions threw them into turmoil in early March.
HMRC now plans to hold a two-week consultation on the MOEX move, so that interested parties could voice opinions before it is finalized. Also, according to the press-release, the UK may rethink its decision if MOEX lifts its recently-introduced restrictions.
“If restrictions placed by MOEX on non-resident investors remain in place, HMRC will publish the revocation order to give effect to this change following consultation,” the UK authority concluded.
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