No. The exclusion from SWIFT does not constitute a permissible reason for cancellation. Time deposits have a contractually fixed term and can only be cancelled under the conditions set out in the contract.

When it is not possible to calculate and publish the unit value, the asset management company can temporarily suspend the redemption of units. For this to be allowed, there must be exceptional circumstances under which it is deemed necessary to suspend redemptions taking into account the legitimate interests of investors.

An example of why a suspension might be necessary is as follows: the net asset value of an investment fund is usually calculated using the most recently quoted prices of the securities in which the fund is invested. If the fund has a considerable holding in Russian-issued securities that are not currently quoted on the stock exchange, it may not be possible to calculate the net asset value.

EU management companies that have suspended redemptions of units so far have generally justified this as follows: due to the Russia-Ukraine conflict and the associated market upheaval, sanctions, stock exchange closures and restricted access to key markets, these measures have been taken in the interests of all investors for investor protection.

For certain investment funds that are invested in Russian-issued securities, the issuance and redemption of units is currently suspended. This has various consequences for investors:

Investors cannot redeem their units with the asset management company for the duration of the suspension.

The fund units are priced at the last quoted fund price.

Yes, regular purchases and redemptions such as accumulation plans and systematic withdrawal plans are also affected.

At present, it is not yet clear when it will be possible again to buy and sell units in investment funds that have been suspended due to the current situation. If you are considering selling your units on the secondary market or via a direct trade, you should be aware that these sales are often associated with a high discount and can therefore result in considerable losses.

The investment funds currently suspended are investment funds from other European countries that are authorised for marketing in Germany. Questions from investors in Germany should be directed to the information agent for the fund. You can find their contact details in the key investor information document provided when you acquired the investment fund units. Alternatively, if your investment company is required to produce and publish a key information document, you can find the contact details for the information agent in this document on the investment company’s website. You can also contact the bank or intermediary that sold you the fund units.

Credit institutions that provide securities accounts are required to forward such purchase offers to all investors that have the security concerned in their securities account. When forwarding the offer, your bank must make it clear that it is just passing on a message from a third party and has not examined the content of the message.

Your bank must also point out that you need to examine the merits of the offer for yourself and decide whether you wish to accept it or not. Take this guidance seriously. BaFin also provides some advice on purchase offers on its website (page only available in German).

Pleate note that these offers could contravene the current sanctions in connection with the war in Ukraine. The Deutsche Bundesbank provides information about the financial sanctions in the document “Frequently asked questions on financial sanctions” on its website and by telephone on +49 89/2889-3800.

If the scope of application of EU sanctions cannot be directly determined based on the text of the Regulation, the European Commission makes the relevant decisions on interpretation. In Germany, the competent authority for the EU’s financial sanctions is the Deutsche Bundesbank (service section – financial sanctions). BaFin is therefore only able to assess legal questions about sanctions on the basis of the relevant announcements by the European Commission and the Deutsche Bundesbank.

Whether or not you can execute orders in these DRs through over-the-counter transactions – e.g. by transferring them to a securities account at another bank or by exchanging them for the underlying Russian shares – or whether this is generally prohibited under Regulation (EU) 269/2014 depends on a large number of factors. It is usually Russian measures rather than EU financial sanctions that prevent client orders from being executed.

Both the European Commission and the Deutsche Bundesbank have clarified that the aforementioned EU sanctions do not prohibit any such exchange or transfer between securities accounts provided that such orders in DRs do not cause funds or economic resources to flow to Russia’s National Settlement Depository (NSD) (Notification by the Deutsche Bundesbank of 11 October 2022). On 27 October 2022, the European Commission’s FAQs on central securities depositories (no. 22) made it clear that a transaction is subject to EU sanctions if it is evident that funds or economic resources are made available (directly or indirectly) to the NSD.

Russia’s introduction of the possibility for investors to execute a forced exchange has made it impossible to carry out any transactions in DRs. The enactment of Federal Law No. 319-FZ in Russia has allowed forced conversion to take place without the participation of all banks involved in the safekeeping of DRs and has thus severely disrupted the ability of American and European central securities depositories to reconcile accounts correctly. Central securities depositories have stated that, as a result, it is impossible to determine whether the DRs recorded are still exchangable or whether they have already been forcibly converted into the underlying securities. For this reason, in the central securities depositories’ opinion, the integrity of securities settlement (i.e. proper execution) currently cannot be guaranteed. In order to uphold the integrity of securities issue (Article 37 of Regulation (EU) No 909/2014) and to protect the property rights of all investors to the greatest degree that is still possible, the participating European and international central securities depositories are therefore currently not allowing any orders in DRs.