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1072. What does Russia-related General License (GL) 46 authorize with respect to credit derivative transactions referencing “the Russian Federation”? 


Russia-related GL 46 authorizes transactions otherwise prohibited by section (1)(a)(i) of Executive Order (E.O.) 14071 related to the establishment, administration, participation in, and execution of an auction process, as announced by the EMEA Credit Derivatives Determination Committee, to settle credit derivative transactions with a reference entity of “the Russian Federation” (“the auction”).  

Examples of transactions that may be related to the auction include the submission and acceptance of bids and offers and physical settlement requests by auction participants and their customers, or the delivery and acceptance of the Russian Federation debt obligations and corresponding settlement amounts.

To promote the proper functioning of such auction, GL 46 also authorizes U.S. persons to purchase or receive Russian Federation debt obligations for the period beginning two business days prior to the announced date of the auction and ending eight business days after the conclusion of the auction. 

GL 46 also authorizes financial institutions, among others, to facilitate, clear, and settle transactions authorized by GL 46, including the transfer to, or purchase or receipt by, U.S. persons of Russian Federation debt obligations.  GL 46 does not require the clearance and settlement of such transactions to be completed within eight business days after the conclusion of the auction.  For example, a purchase by a U.S. person of Russian Federation debt obligations made on the seventh business day after the conclusion of the auction does not have to be settled or cleared by the eighth business day.  Accordingly, U.S. financial institutions may continue settling or clearing such transactions after the eighth business day following the conclusion of the auction. 

Financial institutions processing transactions pursuant to GL 46 may reasonably rely upon the information available to them in the ordinary course of business for the purposes of assessing whether a transaction is authorized by GL 46, provided that the financial institution does not know or have reason to know that a transaction is not in compliance with GL 46.  

Date Released
July 22, 2022