Facts of manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established (27.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established
The Bank of Russia has established facts of manipulation in the market for ordinary shares of OJSC TRANSAERO Airlines (hereinafter, the ‘Shares’) in 2014–2015 at exchange trading.
The Bank of Russia paid attention to the deals conducted between customers of two professional securities market participants.
In the period under review, Jeimbo Cyprus Limited (registered in Cyprus) and Otkritie Advisory Services Limited (registered in the Islands of Bermuda) regularly conducted transactions with the Shares, which resulted in substantial deviations in their trade parameters, almost single-handedly forming the market of the Shares. In addition to exchange transactions, Jeimbo Cyprus Limited and Otkritie Advisory Services Limited entered into reverse OTC transactions.
Instructions to perform transactions on the part of Jeimbo Cyprus Limited were submitted by employees of OJSC TRANSAERO Airlines who were also employed by Jeimbo Cyprus Limited.
Taking into account the financial situation of OJSC TRANSAERO Airlines in the period under review, it was necessary for OJSC TRANSAERO Airlines to create an illusion of trading activity and maintain prices of Shares further used as collateral to borrow funds, which was also conducted through its subsidiary, Jeimbo Cyprus Limited.
Therefore, in accordance with Clause 2 of Part 1 of 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’), deals with Shares entered into by Otkritie Advisory Services Limited and Jeimbo Cyprus Limited qualify as market manipulation. The above-mentioned persons violated the prohibition set out by Part 2 of Article 6 of the Federal Law.
The circumstances, in which the deals with Shares were made, were established thanks to the cooperation between the Bank of Russia and financial market regulators from the UK (Financial Conduct Authority), the Republic of Cyprus (Cyprus Securities and Exchange Commission), and the Islands of Bermuda (Bermuda Monetary Authority) in line with the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO MMoU).
The Bank of Russia has taken measures to prevent market manipulation in further activities of Jeimbo Cyprus Limited. Otkritie Advisory Services Limited is no longer operating.

27 June 2019
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Facts of misuse of insider information and manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established (27.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of misuse of insider information and manipulation in the market for ordinary shares of OJSC TRANSAERO AIirlines established
The Bank of Russia has established that Tatiana Grigorievna Anodina and Aleksandr Petrovich Pleshakov conducted transactions with ordinary shares of OJSC TRANSAERO AIirlines (hereinafter, the ‘Issuer’ and the ‘Shares’) illegally using insider information.
From September to December 2016, A.P. Pleshakov, being one the founders, a shareholder, a member of the board of directors, an insider of and a controlling person with respect to the Issuer, transferred 63,733,508 Shares (41.4% of total voting Shares) from his account to the account of T.G. Anodina based on several share donation agreements.
The information about the termination of grounds for control by A.P. Pleshakov with respect to the Issuer, about the decrease in his share in the total number of voting shares of the Issuer and the increase and subsequent decrease in the share of T.G. Anodina in the total number of voting Shares is insider information of the Issuer and was subject to disclosure.
It is highly likely that disclosure of information about the exit decision from the Issuer’s capital taken by A.P. Pleshakov would have caused sharp changes in the price of Shares.
This insider information was not disclosed, which allowed T.G. Anodina to sell Shares at anonymous exchange trading at current market prices from her own account to a wide range of investors as soon as Shares were credited to the account.
In view of the above, operations to sell the majority of the block of Shares from the account of T.G. Anodina were conducted illegally using insider information, which is a violation of the prohibition set out in Clause 1, Part 1, Article 6 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 Bank of Russia established that the total amount of losses that A.P. Pleshakov and T.G. Anodina had avoided using insider information to sell Shares exceeded 200 million rubles.
The sale of such a significant block of Shares amid a decrease in their trading volume and falling prices due to, among other things, the cancellation of the Issuer’s Air Operator’s Certificate, was also made possible thanks to statements made by the Issuer’s management in the media suggesting a possible resumption of the Issuer’s principal activity. These statements supported investors’ speculative sentiment, offset the price drop due to the sale of Shares from the account of T.G. Anodina, and supported the prices at the level that was comfortable for the misuse of insider information. The market responded to the above-mentioned publications with a surge in the price and trading volume of Shares resulting in substantial deviations of trading parameters.
After the disposal of the whole block of Shares from the account of T.G. Anodina, the Issuer no longer disseminated information about a programme for the Issuer to resume its principal activity. By the ruling of the Court of Arbitration of Saint Petersburg and the Leningrad Region, the Issuer was declared bankrupt in 2017.
Therefore, considering the activities of A.P. Pleshakov, being the major shareholder of the Issuer, it is highly likely that the information disseminated by the Issuer was misleading and the activities of the Issuer and its officials who disseminated the above-mentioned information qualify as manipulation in the market of Shares in accordance with Clause 1, Part 1, Article 5 of the Federal Law.
The activities of A.P. Pleshakov, T.G. Anodina and other persons who facilitated the sale of the block of Shares using insider information and the dissemination of misleading information by the Issuer, which led to a substantial deviation of trading parameters of Shares, show signs of offences stipulated by Articles 185.6 and 185.3 of the Criminal Code of the Russian Federation.
The materials have been submitted to law enforcement agencies.

27 June 2019
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Lost insurance policy forms by JSC IC Sibirsky Spas (28.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Lost insurance policy forms by JSC IC Sibirsky Spas
The Bank of Russia by force of its Order No. ОD-522, dated 14 March 2019, revoked an insurance licence of Joint-Stock Company Insurance Company Sibirsky Spas, Reg. No. 3467, 13 Kuznetskstroyevsky Prospekt, Novokuznetsk, Kemerovo Region (hereinafter referred to as JSC IC Sibirsky Spas).
In line with Clause 4.1, Article 25 of Russian Federation Law No. 4015-1, dated 27 November 1992, ’On the Organisation of the Insurance Business in the Russian Federation’, the Bank of Russia issued Order No. ОD-523, dated 14 March 2019 whereby a provisional administration (hereinafter referred to as the provisional administration) was appointed to JSC IC Sibirsky Spas. The powers of executive bodies of JSC IC Sibirsky Spas were suspended.
Mandatory Insurance Automated Information System data show that JSC IC Sibirsky Spas had 22,261 accountable МММ series forms of compulsory motor third-party liability insurance (hereinafter referred to as CMTPLI accountable forms).
The provisional administration-conducted inventory reconciliation at JSC IC Sibirsky Spas revealed that 18,185 CMTPLI such accountable forms had been lost (the registry of CMTPLI accountable forms is attached).
In line with Clause 4, Article 32.8 of Russian Federation Law No. 4015-1, dated 27 November 1992, ’On the Organisation of the Insurance Business in the Russian Federation’, from the date of entry into force of the insurance supervisory body’s licence revocation decision, the insurance entity shall not be entitled to enter into insurance contracts, reinsurance contracts or insurance brokerage contracts; neither shall it make amendments to respective contracts which entail an increase in liabilities of the insurance entity.
Insurance contracts concluded on behalf of JSC IC Sibirsky Spas following the date of entry into force of the insurance supervisory body’s decision regarding the insurance licence revocation (14 March 2019), including those on CMTPLI accountable forms listed in the registry, shall be deemed invalid.

28 June 2019
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Operations of provisional administration to manage Insurance Company RESPECT, Limited Liability Company (20.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Operations of provisional administration to manage Insurance Company RESPECT, Limited Liability Company
Following the violations by Insurance Company RESPECT, Limited Liability Company (hereinafter, the Company), of the Bank of Russia-established requirements for insurance companies, the Bank of Russia revoked the Company’s insurance licence and appointed a provisional administration to manage the Company by its Orders Nos. OD-1088 and OD-1089, dated 14 May 2019.
By Bank of Russia Order No. OD-1129, dated 20 May 2019, the powers of its executive bodies were suspended.
The provisional administration encountered obstruction to its operations — the Company’s management failed to provide the provisional administration with accounting and other documents, and valuables held by or entrusted to the Company, which may signal the officials’ attempt to conceal facts of asset withdrawal and complicates the assessment of the Company’s assets.
The Bank of Russia submitted the information to the Prosecutor General’s Office of the Russian Federation and the Ministry of Internal Affairs of the Russian Federation for consideration and procedural decision-making.

20 June 2019
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Facts of manipulation in the market for ordinary shares of PJSC Best Efforts Bank (13.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of manipulation in the market for ordinary shares of PJSC Best Efforts Bank
The Bank of Russia has established facts of manipulation in the market for ordinary shares of PJSC Best Efforts Bank (hereinafter, ‘Shares’) in organised trading from December 2016 to May 2018.
The operations consisting in manipulation of the market of the Shares were conducted by two independent groups of individuals.
The first group (Group 1) comprised Gennady Sergeevich Stefanov, Boris Vladimirovich Kaminsky, Oksana Vladimirovna Tolda, Anton Yurievich Logachev, Irina Nikolaevna Vishnyakova, Egor Vladimirovich Kapitanov, and Elena Nikolaevna Surzhikova.
Transactions without a clear economic sense among Group 1 participants were conducted at PJSC Moscow Exchange (hereinafter, the ‘Exchange’) from 31 October 2017 to 21 May 2018 based on instructions with identical price and volume parameters, while counterparties’ orders were entered into the trading system at minimum intervals. The circumstances surrounding the transactions and the nature of trading behaviour are indicative of a collusion between the above-mentioned persons. The actions of Group 1 participants were meant to give the impression of trading activity and led to anomalous Share price growth. As a result, other Share market participants were misled as to the price of the Shares.
The above-mentioned trades over accounts of Group 1 participants were made by G.S. Stefanov, who had entered into an information service agreement (hereinafter, the ‘Agreement’) with a major securities market participant (hereinafter, the ‘Company’). As part of the Agreement, G.S. Stefanov, among other things, provided the Company with such services as finding clients who would be ready to enter into a service agreement with the Company and advising them on Company activities. In particular, within the framework of the Agreement, the Company entered into service agreements with individuals comprising Group 1. Moreover, the Company provided G.S. Stefanov with compensation in the form of a percentage of the commission paid to it by clients brought by G.S. Stefanov.
To conduct transactions over Group 1 participants’ accounts, G.S. Stefanov used the software provided to one of Group 1 participants. Trading accounts were connected to the software based on standard powers of attorney executed by Group 1 participants. At the same time, G.S. Stefanov conducted transactions over his own account opened with another professional securities market participant.
The investigation of trades in the Shares market on the Exchange also revealed Shares market manipulation transactions conducted in collusion between Igor Muratovich Takoev and Snezhana Aleksandrovna Zhdanova (Group 2). These persons’ trading accounts were opened with different professional securities market participants. Instructions to conduct mutual transactions from 22 December 2016 to 22 May 2017 were given by I.M. Takoev who obtained a positive financial result from trades with S.A. Zhdanova. These transactions resulted in a significant deviation of the price of Shares.
Operations conducted by Group 1 in the Shares market are classified as market manipulation under Clause 2 of Part 1 of 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’) and under Clause 6 of Part 1 of Article 5 of the Federal Law. Operations conducted by Group 2 are classified as market manipulation under Clause 2 of Part 1 of Article 5 of the Federal Law.
The Bank of Russia has taken a set of measures to put an end to the violations of the Federal Law by persons involved in the Shares market manipulation, including in line with the provisions of the Russian Federation Code of Administrative Offences.

13 June 2019
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Operations of provisional administration to manage Insurance Company Angara, Limited Liability Company (13.06.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Operations of provisional administration to manage Insurance Company Angara, Limited Liability Company
Following the violations by Insurance Company Angara, Limited Liability Company, of the Bank of Russia-established requirements for investing insurance reserves and equity capital, the Bank of Russia revoked the Company’s insurance licence, suspended the powers of its executive bodies, and appointed a provisional administration to manage the Company (hereinafter, the provisional administration) by its Orders Nos. OD-687 and OD-688, dated 28 March 2019.
The provisional administration encountered obstruction of its operations — the Company’s management failed to provide the provisional administration with accounting and other documents, and valuables held by or entrusted to the Company, which may signal the officials’ attempt to conceal facts of asset withdrawal and complicates the assessment of the Company’s assets.
Also, the provisional administration revealed operations aimed at asset withdrawal by means of replacement of liquid assets with non-liquid ones.
The Bank of Russia submitted the information to the Prosecutor General’s Office of the Russian Federation and the Ministry of Internal Affairs of the Russian Federation for consideration and procedural decision-making.

13 June 2019
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Facts of securities market manipulation by V.V. Fedorin established (30.05.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of securities market manipulation by V.V. Fedorin established
The Bank of Russia has established facts of market manipulation in 17 low-liquid securities (including shares and bonds) in the period from 2011 through 2017 committed by Vladislav V. Fedorin via the unscrupulous use of assets in other persons’ broker accounts.
Being a staff member and a representative of large broker organisations in Chelyabinsk, and possessing experience in transactions with financial instruments, V.V. Fedorin obtained passwords to broker accounts from two individuals (hereinafter, the Principals) having trust-based relations with them. V.V. Fedorin used the Principals’ assets to conduct transactions in organised trading in the markets of 27 low-liquid securities.
As a result of deliberate transactions concluded in organised trading between the Principals’ broker accounts, on the one hand, and his own broker account, as well as the broker account of his spouse, Olga A. Averyanova, on the other hand, V.V. Fedorin bought the securities of his Principals at underestimated prices on several occasions. Further on, he derived income from the sale of these securities at overestimated prices; and he also sold securities to the Principals at higher prices compared to the market ones.
According to the Bank of Russia’s calculations, the above-mentioned securities transactions led to losses totalling over 5.5 million rubles for the Principals. This being the case, it was impossible for the damaged persons to independently find out that the transactions with their assets had been beneficial for V.V. Fedorin and his spouse because of the anonymous nature of trading.
Transactions between the said persons in the markets for 17 out of 27 securities, which have caused significant deviations in trading parameters, are categorised as market manipulation under Clause 2 of Part 1 of 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 Bank of Russia has submitted the investigation materials to law enforcement authorities. It has also taken measures against the persons involved in bond market manipulation to prevent similar violations in future. The Bank of Russia decided to cancel the qualification certificates of a financial market specialist issued to V.V. Fedorin.

30 May 2019
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MIL OSI

Facts of manipulation in the market for ordinary shares of PJSC ASKO-STRAKHOVANIE established (22.05.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of manipulation in the market for ordinary shares of PJSC ASKO-STRAKHOVANIE established
The Bank of Russia has established facts of manipulation in/during organised trading (hereinafter, the Exchange) in the market for ordinary shares of PJSC ASKO-STRAKHOVANIE in 2017–2018 (hereinafter, the Shares) by a group of persons from the Chelyabinsk Region.
Transactions with the Shares were conducted on the Exchange across the broker accounts of OK—Finance LLC (TIN 7453268383), Gleb A. Ivanov, Artem A. Kryukov, Arseniy V. Bakaev, Mikhail A. Del, Mikhail A. Dobrovolskiy, Sergei Ye. Grigoriev, Elena A. Zhuravleva, Ivan I. Fait, Igor O. Zvonarev, Svetlana V. Ivanova, and Alexander N. Chernyshov (hereinafter, the Group).
The operations were coordinated by A.A. Kryukov, employee of OK—Finance LLC, a company affiliated with Aleksey D. Ovakimyan, a member of the Supervisory Board and an insider of PJSC ASKO-STRAKHOVANIE, who, among other things, used special software allowing similar trade operations to be conducted across several accounts. Individuals’ trading accounts were connected to the software provided by A.A. Kryukov on the basis of powers of attorney issued by a professional securities market participant.
Over the period from 11 July 2017 through 27April 2018, transactions involving this Group represented over 50% of the total Shares trading volume. Shares transactions conducted inside the Group repeatedly led to considerable deviations in the trading volume and Shares price on the Exchange. Besides, the transactions conducted by A.A. Kryukov, G.A. Ivanov and OK—Finance LLC maintained the Share price at a level that differed considerably from the level that would have been otherwise achieved in the absence of such transactions. As a result, other Shares market participants were misled as to the Share price, and the mechanism of fair pricing on the Exchange was distorted.
The established relations between these persons, including those with the Share issuer, as well as the mechanism of executing trades on the Exchange in the period following the Shares’ placement, shows that the Group’s operations were aimed at the artificial creation and maintenance of trading activity in the Shares market.
These operations, conducted by the Group in the Shares market, are qualifies as market manipulation under Clause 2 of Part 1 of 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 performed by OK—Finance LLC, G.A. Ivanov and A.A. Kryukov are also qualified as market manipulation under Clause 6 of Part 1 of Article 5 of the Federal Law.
The Bank of Russia has taken a set of measures to put an end to the violations of the Federal Law by persons involved in the Shares market manipulation, inter alia in line with the provisions of the Russian Federation Code of Administrative Offences.
The Bank of Russia calls for close control of clients’ operations by professional securities market participants in order to eliminate all and any chance of quasi-trust management on the basis of powers of attorney and the associated risks of violating the Federal Law.

22 May 2019
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MIL OSI

Facts of manipulation in the market for ordinary shares of PJSC ChZPSN-Profnasteel, PJSC OGK-2, PJSC RAZGULAY Group, PJSC Ashinskiy Metzavod and PJSC Tuchkovskiy KSM established (22.05.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Facts of manipulation in the market for ordinary shares of PJSC ChZPSN-Profnasteel, PJSC OGK-2, PJSC RAZGULAY Group, PJSC Ashinskiy Metzavod and PJSC Tuchkovskiy KSM established
The Bank of Russia has established facts of manipulation in organised trading (hereinafter, on the Exchange) in the market for ordinary shares of PJSC ChZPSN-Profnasteel, PJSC OGK-2, PJSC RAZGULAY Group, PJSC Ashinskiy Metzavod and PJSC Tuchkovskiy KSM (hereinafter, jointly the Securities) in 2015–2017.
Securities transactions were conducted on the Exchange across the broker accounts of the clients of a professional securities market participant: by Nadezhda A. Karabintseva, Konstantin V. Izvekov, Yapi Trade LLC (TIN 7453268320), Dmitry A. Karabintsev and several individuals related to them (hereinafter, the Individuals).
The Bank of Russia revealed similar-in-type colluded operations with the Securities, whereby the Individuals’ transactions affected the Securities’ prices in trading on the Exchange and created favourable conditions for buying/selling considerable blocks of the Securities by N.A. Karabintseva and K.V. Izvekov with profit.
As a result of 27 series of such operations, N.A. Karabintseva and K.V. Izvekov managed to derive a total income exceeding 120 million rubles. Eventually, the Individuals may highly likely have incurred comparable losses due to the fact that their assets had been involved in the said operations.
As part of the mentioned series of operations, over 400 Securities transactions conducted between N.A. Karabintseva and K.V. Izvekov, on the one side, and the Individuals, on the other side, caused considerable deviations in the trading volume of Securities .
In the course of its investigation, the Bank of Russia found out that, in all probability, it was D.A. Karabintsev who was behind the coordinated submission of instructions by the mentioned persons to make transactions, because the Individuals entrusted him with passwords to their own online broker accounts.
The investigation also revealed that D.A. Karabintsev made transactions with the ordinary shares of PJSC ChZPSN-Profnasteel and PJSC OGK-2 between his own broker account and the account of Yapi Trade LLC he controlled. These transactions led to considerable deviations in trading parameters of the Securities.
The mentioned Securities transactions conducted across the accounts of Yapi Trade LLC, D.A. Karabintsev, N.A. Karabintseva, K.V. Izvekov and the Individuals are categorised as Securities 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, the Federal Law).
The Bank of Russia has forwarded the findings of the investigation to law enforcement agencies.
The regulator calls attention to serious risks of violating the Federal Law, associated with third parties gaining access to broker accounts thanks to the key information they receive.

22 May 2019
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Operations of Joint-stock Company National Insurance Company TATARSTAN (21.05.2019)

Source: Central Bank of the Russian Federation in English

Information Notice
Operations of Joint-stock Company National Insurance Company TATARSTAN
By its Order No. OD-1090, dated 14 May 2019, the Bank of Russia revoked the insurance licences from Joint-stock Company National Insurance Company TATARSTAN, Registration No. 3116 (2 Marshala Chuikova Str., block B, Kazan, Republic of Tatarstan; further referred to as JSC NASKO). In accordance with Clause 4, Article 32.8 of Russian Federation Law No. 4015-1, dated 27 November 1992, ‘On the Organisation of Insurance Business in the Russian Federation’, the Bank of Russia appointed a provisional administration to JSC NASKO by its Order No. OD-1091, dated 14 May 2019.
The provisional administration failed to gain access to the necessary documents, archive and electronic databases of JSC NASKO, as well as to soft- and hardware used to register, process and store documents.
In these circumstances, the provisional administration applied to law enforcement agencies.
Given that the provisional administration cannot detect the location of all compulsory motor third-party liability insurance policy forms (OSAGO policy forms) to withdraw them, it has recognised these policy forms as lost.
It is of note that in accordance with Clause 4, Article 32.8 of Russian Federation Law No. 4015-1, dated 27 November 1992, ‘On the Organisation of Insurance Business in the Russian Federation’, an insurance agent cannot conclude insurance, reinsurance and insurance brokerage contracts, and make amendments to such contracts which increase the insurance agent’s liabilities starting from the effective date of the insurance supervisor’s decision on licence revocation.
Insurance contracts concluded on behalf of JSC NASKO after the effective date of the Bank of Russia’s decision to revoke the insurance agent’s licence (15 May 2019), including with the use of OSAGO policy forms listed in the register, shall be invalid.
The Bank of Russia notes, that given the suspension of the powers of JSC NASKO executive bodies by Bank of Russia Order No. OD-1132, dated 20 May 2019, information unidentified persons may publish in mass media on behalf of JSC NASKO has no relevance to the activity of the provisional administration and the current state of JSC NASKO.
The powers of attorney previously issued by JSC NASKO have been terminated.

21 May 2019
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