Operations of provisional administration of Limited Liability Company Povolzhsky Strakhovoi Alyans (29.01.2020)

Source: Central Bank of the Russian Federation in English

Operations of provisional administration of Limited Liability Company Povolzhsky Strakhovoi Alyans
By its Orders No. OD-2063 and OD-2064, dated 5 September 2019, the Bank of Russia revoked the insurance licences of PSA LLC (hereinafter, the Company), appointed a provisional administration to manage the Company (hereinafter, the provisional administration) and suspended the powers of its executive bodies.
In the course of its operations, the provisional administration established facts suggesting that illegal efforts were made by the Company’s managers and owners, as well as third parties, towards withdrawal of corporate assets through their sale below the market price and through the buyback of a share in the authorised capital of the Company from its participants during the implementation of the financial rehabilitation plan.
On 14 January 2020, the Arbitration Court of the Samara Region recognised the Company as insolvent (bankrupt). The State Corporation Deposit Insurance Agency was appointed as receiver.
The Bank of Russia submitted the information on the Company’s transactions suspected of being criminal offences to the Prosecutor General’s Office of the Russian Federation and the Investigative Committee of the Ministry of Internal Affairs of the Russian Federation for consideration and procedural decision-making.

29 January 2020
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Operations of provisional administration to manage LLC Insurance Company SERVICERESERVE (10.01.2020)

Source: Central Bank of the Russian Federation in English

Operations of provisional administration to manage LLC Insurance Company SERVICERESERVE
Following the violations by Limited Liability Company Insurance Company SERVICERESERVE (hereinafter, the Company) of the insurance requirements established by the Bank of Russia, the regulator, by its Orders No. OD-1944 and No. OD-1945, dated 26 August 2019, revoked the Company’s insurance licences, appointed a provisional administration to manage the Company (hereinafter, the provisional administration) and suspended the powers of its executive bodies.
The provisional administration established facts suggesting that the Company’s owners and officials had committed actions causing property damage to the Company.
The provisional administration estimates the value of the Company’s property (assets) to be insufficient to meet its liabilities to creditors and make mandatory payments.
In view of the above, on 5 November 2019 the provisional administration applied to the Arbitration Court of the Vladimir Region to declare the Company insolvent (bankrupt).
Given a threat to the rights and legitimate interests of policy holders, the insured and beneficiaries, the Bank of Russia submitted the information to the Prosecutor General’s Office of the Russian Federation and the Investigative Department of the Ministry of Internal Affairs of the Russian Federation for consideration and procedural decision-making.

10 January 2020
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Facts of manipulation in financial instrument markets established (26.12.2019)

Source: Central Bank of the Russian Federation in English

Facts of manipulation in financial instrument markets established
The Bank of Russia has established facts of multiple manipulations at the exchange in the markets for fourteen issuers’ shares (hereinafter, the Shares) during the period from 13 November 2014 to 23 March 2015 (hereinafter, the Period) by employees of CJSC Leader (TIN 5018026672) Andrey Siluyanov and Anton Chvirov, responsible for the management of assets of CJSC Leader’s clients and that of the assets of a client of LLC Management Company Severyanka (TIN 7713502214) (hereinafter, collectively the Management Companies).
The investigation has established that Andrey Siluyanov and Anton Chvirov, abusing their positions, conducted transactions with the Shares using the funds of the Management Companies’ clients in trust and their own funds in Andrey Siluyanov’s brokerage account.
In these transactions, they employed the following scheme: using the funds of the Management Companies’ clients transferred in trust, Andrey Siluyanov and Anton Chvirov conducted transactions to purchase or sell the Shares, inducing either a rise or a drop in their price. The market conditions resulting from such actions were used to close the position earlier opened on the Shares in Andrey Siluyanov’s brokerage account with a profit from transactions with the Management Companies. This trading behaviour entailed significant deviations in the trading volumes of the Shares.
Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the transactions with the Shares carried out during the Period in the Management Companies’ and Andrey Siluyanov’s brokerage accounts, which caused significant deviations in trading volumes, are classified as manipulation in the market for the Shares. The above actions generated a positive financial result in Andrey Siluyanov’s brokerage account.
The Bank of Russia took administrative measures against the persons involved in market manipulation in order to prevent similar violations in the future.
The materials of the investigation have been submitted to law enforcement authorities.

26 December 2019
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Operations of provisional administration of Limited Liability Company KRK-Insurance (13.12.2019)

Source: Central Bank of the Russian Federation in English

Operations of provisional administration of Limited Liability Company KRK-Insurance
By its Orders Nos. OD-1839 and OD-1840, dated 8 August 2019, the Bank of Russia appointed a provisional administration to manage Limited Liability Company KRK-Insurance (hereinafter, the Company) and suspended its insurance licences (hereinafter, the licences). As the provisional administration encountered obstruction of its operations from the Company’s management, the Bank of Russia, by its Orders Nos. OD-1879 and OD-1883, dated 15 August 2019, revoked the Company’s licences and suspended the powers of its executive bodies.
In the course of its operations, the provisional administration established facts suggesting that illegal efforts were made by the Company’s managers and owners, as well as third parties, towards withdrawal of corporate assets, which were in part executed through transactions with securities, means of transportation and immovable property.
On 2 December 2019, the Arbitration Court of the City of Moscow recognised the Company as insolvent (bankrupt). The State Corporation Deposit Insurance Agency was appointed as receiver.
The Bank of Russia submitted the information on the Company’s transactions suspected of being criminal offences to the Prosecutor General’s Office of the Russian Federation and the Investigative Committee of the Ministry of Internal Affairs of the Russian Federation for consideration and procedural decision-making.

13 December 2019
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Facts of manipulation in markets for USDRUB_TOM and EURRUB_TOM foreign exchange instruments (05.12.2019)

Source: Central Bank of the Russian Federation in English

The Bank of Russia has established multiple facts of manipulation in the markets for USDRUB_TOM and EURRUB_TOM foreign exchange instruments during the period from 13.04.2018 to 13.06.2018 by Nikolay Bychkov and Fengda Trading Ltd (non-resident legal entity).
Acting during the above period as a person authorised to conduct FX transactions and manage the FX position of the State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) (hereinafter, Vnesheconombank1), Nikolay Bychkov repeatedly carried out transactions at anonymous exchange trading in collusion with one and the same counterparty — Fengda Trading Ltd throughout the period in question using an identical scheme.
After a purchase or uncovered sale of a certain amount of foreign currency at market prices, Fengda Trading Ltd placed one or several limited orders for closing this new position at more favourable prices. After a short period of time that was generally not sufficient for a foreign currency price to materially change, Nikolay Bychkov, acting on behalf of Vnesheconombank, placed one or several orders, and their immediate execution drove the foreign currency price to the levels conforming to the counterparty’s orders, owing to which the counterparty was able to close its positions with a profit.
This trading behaviour of the counterparty entailed significant deviations in FX instrument trading volumes.
In accordance with Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’, the above actions committed during the period from 13.04.2018 to 13.06.2018 by Nikolay Bychkov on behalf of Vnesheconombank and his counterparty that caused considerable deviations in FX instrument trading volumes are classified as market manipulation.
As a result of over 50 series of transactions under the above scheme, Fengda Trading Ltd obtained income exceeding 49 million rubles.
The Bank of Russia has sent orders to avoid similar violations in future to Nikolay Bychkov and Fengda Trading Ltd.
The Bank of Russia has provided the documents on the investigation to the law enforcement bodies.
1 Pursuant to Federal Law No. 82-FZ, dated 17 May 2007, as amended on 28 November 2018, Vnesheconombank was reorganised into State Development Corporation VEB.RF.

05 December 2019
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Facts of manipulation in market for investment units of Rental CUIF KHoly Land and Rental CUIF Kottedzhio Park managed by Asset Management Solutions LLC (04.12.2019)

Source: Central Bank of the Russian Federation in English

The Bank of Russia has established facts of manipulation during trading at the exchange in the markets for units of Closed-end Rental Unit Investment Fund Holy Land (ISIN: RU000A0JVUU7) and Closed-end Rental Unit Investment Fund Kottedzhio Park (ISIN: RU000A0JUUC7) managed by Asset Management Solutions LLC (hereinafter collectively, the Units and the Funds) during the period from October 2014 to July 2018 (hereinafter, the Period).
Trading in the market for the Units during the Period was mostly carried out by concluding transactions in collusion between two unrelated groups of entities and individuals.
The first group (Group 1) included entities and individuals related in various ways: LLC Canopus Finance (TIN 5406771420; previously — LLC Krasoil Finance ), LLC Cataris Capital (TIN 7733224572), LLC Managing Partner Cross Finance Group (TIN 7718309373), LLC Investment Company Energyiya Sintez (TIN 7702626754) and its legal successor Investment Company Averazh Ltd (TIN 2635107776), HAYFOLD COMPANY LTD (HE 313274), Viktor Oparin, Yury Sokolov, Alexandr Shakirov, Vadim Shakirov, Nikita Bushuev, Eduard Golubovich, Andrey Grishin, Alexandr Margolis, Alexey Shchepelev and Alexey Yakovlev.
The investigation has established circumstances evidencing that the most probable intentiom of transactions in the Units conducted by the above entities and individuals during the Period was to simulate trading activity and maintain acceptable prices for and trading volumes of the Units. These transactions caused significant deviation of the price for the Units.
The second group (Group 2) included related persons Dmitry Malakeev, Arsen Movsesyan and Roman Volkov who conducted Unit transactions in collusion during the period from November 2015 to November 2016. These transactions caused significant deviation of the price for the Units.
The Bank of Russia has also established signs of distortion in the price stated by appraisers when compiling reports on the valuation of the real estate being part of the Funds’ asset portfolios. In particular, the Bank of Russia has established that the land plots for sale offers used as comparables in the valuation were posted in the internet using the IP address of a valuation company employing the appraiser who had prepared and signed the valuation report.
Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law), the actions of the entities and individuals from Group 1 and Group 2 are classified as manipulation in the market for the Units. The actions committed by LLC Cataris Capital, LLC Canopus Finance, IC Averazh Ltd, LLC Managing Partner Cross Finance Group, HAYFOLD COMPANY LTD, Nikita Bushuev, Eduard Golubovich, Andrey Grishin, Alexandr Margolis, Alexandr Shakirov, Alexey Shchepelev and Alexey Yakovlev with the purpose of deceit as to the price of the Units are also classified as manipulation in the market for the Units in accordance with Clause 6, Part 1, Article 5 of the Federal Law.
The above entities and individuals breached the ban imposed by Part 2, Article 6 of the Federal Law.
The Bank of Russia has sent orders to avoid similar violations in future to the individuals and operating legal entities who conducted the above transactions with the Units.

04 December 2019
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MIL OSI

Facts of manipulation in market for units of Real Estate CUIF Arshin managed by CJSC Diana Management Company established (22.11.2019)

Source: Central Bank of the Russian Federation in English

The Bank of Russia has established facts of manipulation in the market for units of Real Estate CUIF Arshin (ISIN: RU000A0JUN16; hereinafter, the Units and the Fund) managed by CJSC Diana Management Company (hereinafter, the Management Company) in on-exchange trading from 27 August 2014 through 27 June 2016 (hereinafter, the Period).
The Bank of Russia has further established that the market for on-exchange trading with the Units is formed by trades by customers of Russian professional securities market participants: Agro Capital LLC (TIN: 5007058270), PJSC Montazh (TIN: 5056000107), Teplo-Service LLC (TIN: 7721781963) and OZP LLC (TIN: 7704255819) hereinafter, the Unit Market Participants).
The investigation revealed multiple ties between the Unit Market Participants and the Management Company. In addition, the Unit Market Participants and the associated appraisal company misled Unit market participants and misstated the cost of the Fund’s assets when it had been created and in on-exchange Units trading.
The Bank of Russia has established that the Unit Market Participants, in collusion with one another, conducted offsetting trades with the Units having identical price and volume parameters. This helped form and maintain the price of the Units in on-exchange trading. In addition, trades of the Unit Market Participants caused significant deviations in the trading parameters of Unit during the Period.
Pursuant to Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law), the actions taken by Agro Capital LLC, PJSC Montazh, Teplo-Service LLC and OZP LLC during the Period are qualified as Unit market manipulation.
Thereby, these entities violated the ban imposed by Part 2, Article 6 of the Federal Law.
The Bank of Russia sent instructions to Agro Capital LLC, PJSC Montazh, Teplo-Service LLC and OZP LLC aimed at preventing similar violations in future.

22 November 2019
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Bank of Russia established unlicensed brokerage activity by BORSA TRADE Ltd (21.11.2019)

Source: Central Bank of the Russian Federation in English

The Bank of Russia established a fact of performing brokerage activity by BORSA TRADE Ltd (Primary State Registration Number 1161832078605; hereinafter, the Company) without the proper licence of the Bank of Russia.
Through its website, the Company engaged individuals in order to carry out internet trading. This involved transactions conducted in exchange trading marketplaces, namely PJSC Moscow Exchange, via professional securities market participants.
Transactions were carried out at the exchange on behalf of the Company. However, the engaged clients—traders actually acted using their own funds, in their own interests and at their own risk. The Company incurred no losses when transactions gave negative results and received profit in the form of a fee when transactions were successful. Therefore, the operations of the Company and its clients—traders were virtually identical to activities of brokers and their customers performed under brokerage agreements.
In accordance with Part 1, Article 39 of Federal Law No. 39-FZ, dated 22 April 1996, ‘On the Securities Market’ (hereinafter, Law No. 39-FZ), brokerage activity is subject to licensing by the Bank of Russia. Pursuant to Part 6, Article 51 of Law No. 39-FZ, unlicensed professional activity in the securities market is illegitimate.
On 18 July 2019, the Arbitration Court of the Udmurt Republic rendered its Ruling on case No. А-71-9861/2019 (hereinafter, the Ruling) initiated by the Central Bank of the Russian Federation, under which the Company was subjected to administrative liability in compliance with Part 2, Article 14.1 of the Russian Federation Code of Administrative Offences.
By its decree, dated 17 October 2019, the Seventeenth Arbitration Court of Appeal left this Ruling unchanged and dismissed the appeal filed by BORSA TRADE Ltd.
In pursuance of the requirements stipulated by Part 6, Article 51 of Law No. 39-FZ, BORSA TRADE Ltd was notified that it should apply to the Bank of Russia for a broker licence.

21 November 2019
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MIL OSI

Information about responsible actuary N.N. Kalinin removed from the register (15.11.2019)

Source: Central Bank of the Russian Federation in English

Information about responsible actuary N.N. Kalinin removed from the register
On 14 November 2019, the Bank of Russia decided to remove information on Nikolay Nikolaevich Kalinin from the single register of responsible actuaries (entry number 65).
The petition to cancel the responsible actuary attestation of N.N. Kalinin was received from the self-regulatory organisation of actuaries ‘Association Guild of Actuaries’ due to identified violations by N.N. Kalinin of the requirements of Clause 1, Part 2, Article 6 of the Federal Law No. 293-FZ, dated 2 November 2013, ‘On Actuarial Activities in the Russian Federation’ and federal standards of actuarial activity with regard to implementing and disclosing the results of control procedures to verify the completeness and reliability of information which led to a misrepresentation of the adequacy of liabilities formed by an insurance company.
The Bank of Russia found that N.N. Kalinin committed such violations systematically.
The grounds for the exclusion are Clauses 2 and 5, Part 8, Article 7 of the Federal Law No. 293-FZ, dated 2 November 2013, ‘On Actuarial Activities in the Russian Federation’.

15 November 2019
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Facts of manipulation in the market for units of Rental CUIF Key Business Model – Alfa established (25.10.2019)

Source: Central Bank of the Russian Federation in English

Facts of manipulation in the market for units of Rental CUIF Key Business Model – Alfa established
The Bank of Russia has established facts of manipulation in the market for units of rental closed-end unit investment fund Key Business Model — Alfa (hereinafter, Units) on an organised trading venue in 2015.
Transactions qualified as Unit market manipulation were conducted in July 2015 by VIP Universal Ltd, a foreign company incorporated under the law of Seychelles, in collusion with a number of Russian legal entities subsequently liquidated. Following the applicable trading scheme, Russian companies regularly purchased Units from the sole counterparty VIP Universal Ltd. Thereby, they diverted money to its bank accounts outside the Russian Federation. The investigation revealed that the participants in the said scheme might have centralised decision-making. The actions of these entities caused a significant deviation in the volume of Unit trades.
The Unit market was also manipulated by GM Realt LLC and the affiliated management company Interfinance MC LLC which used funds of the Mixed CUIF Clean Energy and Real Estate CUIF Optimal (hereinafter, the Management Company).
The Bank of Russia has established that GM Realt LLC in collusion with the Management Company carried out Unit transactions from 13 August 2015 through 7 September 2015, which had a considerable effect on Unit prices. As a result of these transactions, GM Realt LLC purchased from the Management Company a significant block of Units at an artificially reduced price to the detriment of unit holders of unit investment funds managed by the Management Company.
The actions of VIP Universal Ltd and its counterparties, as well as of GM Realt LLC and Interfinance MC LLC are qualified as Unit market manipulation under Clause 2, Part 1, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter referred to as the Federal Law). Thereby, these entities violated the ban imposed by Part 2, Article 6 of the Federal Law.
The Bank of Russia took administrative measures with respect to the persons engaged in market manipulation, aimed at preventing such violations in the future.

25 October 2019
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MIL OSI