NSD

TAX PROCEDURE TECHNIQUES

  1. Communication Channels and Tax Disclosure Forms

In 2014, the following communication channels may be used to submit Tax Disclosure statements in electronic format:

-SWIFT (SWIFTFinandSWIFT FileActSnF);

-WEB-Access.

It is expected that submission of Tax Disclosure statements via WEB-Service (using LUCH on-line) will be available by 2015.

  1. Role of an Authorized Tax Representative in the Course of Electronic Data Interchange

An Authorized Tax Representative shall submit Tax Disclosure statements on behalf of a foreign nominee on the basis of a power of attorney. All electronic data interchange processes in the course of tax procedures shall take place between NSD and such Authorized Tax Representative. The only exclusion is that a request for Tax Disclosure shall be sent by NSD directly to the foreign nominee. Any Authorized Tax Representative must be duly authorized to perform electronic data interchange with NSD.

Where an Authorized Tax Representative acts as a foreign nominee securities account operator, the Authorized Tax Representative shall hold 4 powers of attorney:

Powers of attorney in the name of the relevant legal entity:

A. A power of attorney for exercising the functions of a representative of another EDI Participant (in accordance with clause 3.4.2 of NSD’s EDI Rules) for the purpose of remote access to the foreign nominee securities account;

B. A power of attorney for submitting Tax Disclosure statements on behalf of the foreign nominee (Appendix to the Regulations on the Procedure for Performance of Withholding Agent Functions under the Russian Tax Code);

Powers of attorney in the name of the relevant individuals:

C. A power of attorney authorizing the relevant employees to sign electronic documents in NSD’s EDI System (clause 2.5.9 of NSD’s EDI Rules) for the purpose of remote access to accounts;

D. A power of attorney authorizing the relevant employees to sign Tax Disclosure statements, in a form similar to the form of a power of attorney for signing electronic documents in NSD’s EDI System (clause 2.5.9 of NSD’s EDI Rules).

  1. EDI Agreement with NSD

For the purposes of electronic data interchange via WEB-Access, foreign nominees or their Authorized Tax Representatives shall sign an EDI Agreement with NSD. The EDI Agreement form and information regarding its execution are available on NSD’s official web site:

NSD’s EDI Presentation:

  1. Subscription to Web-Access

4.1. For foreign nominees or their Authorized Tax Representatives who have an EDI Agreement with NSD

For the purposes of electronic data interchange with NSD via WEB-Access, a foreign nominee or his Authorized Tax Representative shall submit an EDI Application Form to NSD, stating that WEB-Access will be used for electronic data interchange and naming the Authorized Tax Representatives who may already be registered with NSD as WEB-Access users (an EDI Application Form is given below).

All necessary information regarding Internet browser settings is available in the Instructions for Subscribing to NSD’s WEB-services Using a TLS Connection, posted on NSD’s web site (EDI/EDI System/Software/ NSD’s EDI System’s Local Interface (Web-service)).

EDI APPLICATION FORM

______20__

In accordance with the terms and conditions of Electronic Data Interchange AgreementNo.___dated ______, 20____, we, ______

(organization’s full name and legal form)

(hereinafter referred to as the “Participant”), apply for the use of the following procedures for the purposes of Electronic Data Interchange with NSD:

  1. For Depository/Clearing/Repository Operations:

Participant’sDepository (Repository) Code:

Connection to the NSD’s EDI System via Web-Access, with the registration of the following Authorized Representatives of the Participant*:

1.______

(full name, position, telephone, E-mail)

2.______

(full name, position, telephone, E-mail)

* The Participant may only list those representatives whose authority to sign Electronic Documents in the NSD’s EDI System is certified by a valid Power of Attorney containing one of the following wording options related to the authority: 1 or 2 (Appendix 2 to the EDI Rules), or those representatives who act on behalf of the Participant by virtue of law and/or under the Participant’s constituent documents.

For the Participant:

______

(position of the Participant’s chief executive officer)

______

(signature) (initials and last name of the Participant’s chief executive officer)

Chief Accountant

______

(signature) (initials and last name of the Participant’s Chief Accountant)

Seal

4.2. For foreign nominees or their Authorized Tax Representatives who do not have an EDI Agreement with NSD:

For the purposes of electronic data interchange with NSD, foreign nominees or their Authorized Tax Representatives who do not have an EDI Agreement with NSD must follow the provisions of Appendix 1 to NSD’s EDI Rules:

  1. Subscription to SWIFT FileAct Service
  • At (in the ‘Ordering’ section) subscribe to the services FileActSnFlive(swift.generic.fast) andFileActSnFtest(swift.generic.fast!p). The service activation date in SWIFT will be shown when filling in the form on the web site (activation takes up to 2 weeks).
  • Similarly for the test and live services:

Requestor DN: sender’s DN

Responder DN: receiver’s DN, where:

NSD’s DN is always «o=micurumm,o=swift»

nominee’s (Authorized Tax Representative’s) DN is usually «o=xxxxxxxx,o=swift», where xxxxxxxx is nominee’s (Authorized Tax Representative’s) SWIFT code

RequestType /MessageIdentifier»: «seev.xxx.nsd.depo»

Differently for the test and live services:

For the test service: Service Name/Service - «swift.generic.fast!p».

For the live service: Service Name/Service - «swift.generic.fast».

  1. ContactPersonsforSubscription Questions

Russian-speaking clients should contact the following persons:

Subscription to SWIFT FileAct:Alexander Nagayuk: T: +7(495)234-4830,E:

Subscription to WEB-Access:Vyacheslav Gorbatenkov: T:+7(495)956-0934,

E:

English-speaking clients should contact the following persons:

Alina Ertman: T: +7 (495) 234-48-27, ext. 4805,E:

Alena Chekulaeva:T: +7 (495) 234-48-27, ext. 4804,E:

  1. Choosing a Communication Channel for Submitting Tax Disclosure Statements (Comparison)

Characteristic / SWIFT FileAct / Web-Access / DHL Courier Service (delivery in hard copy)
Availability / If the sender is a SWIFT user, it is required to subscribe to the SWIFT FileAct service on the web site of SWIFT; otherwise, it is first required to become a SWIFT user. / If the sender is an EDI Participant of NSD, it is required to file an EDI Application Form for electronic data interchange via WEB-Access and receive a login and password; otherwise, it is first required to become an EDI Participant of NSD. / Availability of a DHL office
Costs (per Tax Disclosure statement) / In accordance with the SWIFT fee schedule (EUR 3.3 for exchange of archived files) / Almost for free (covered by Internet use costs) / In accordance with the DHL fee schedule (EUR 50-75 per mailing)
IT costs / The applicable software is to be upgraded to enable preparation of Tax Disclosure statements in XML format and their integration via SWIFT FileAct / No / No
Manual work / Automated processes do not involve any manual work / Tax Disclosure statements are filled in manually / Filling in Tax Disclosure statements for printing out (if automation tools are unavailable)
Promptness of Tax Disclosure (depends on the time of receipt of Tax Disclosure statements by NSD) / Tax Disclosure statements are deemed delivered upon their receipt via SWIFT / Tax Disclosure statements are deemed delivered upon their correct entry / Tax Disclosure statements are deemed delivered upon their receipt and subsequent manual entry
Work required / Automated processes do not involve any manual work / Manual entry of Tax Disclosure statements by the foreign nominee / Great amount of manual work required to enter information.
Arrangements need to be in place for data interchange, control and verification.
  1. Joint Testing Procedure

To perform a test, a foreign nominee or his Authorized Tax Representative needs to:

  • Inform the account manager that the foreign nominee/Authorized Tax Representative wishes to perform a Tax Disclosure test;
  • Choose a communication channel (service) to be used for Tax Disclosure purposes;
  • Subscribe to the relevant test service (SWIFT FileAct or WEB-Access);
  • Receive from the account manager a standard test script and necessary documents (links to documents available on NSD’s web site) concerning the data interchange procedure and disclosure formats;
  • Agree upon the test script in relation to the procedure and necessary attributes (securities account number(s); list of securities to be covered by the test; and balance of securities to be covered by Tax Disclosure); and
  • Determine the time schedule of the test.
  1. Comparison of Disclosure for Corporate Actions and Tax Disclosure

Disclosure for corporate actions / Disclosure for tax purposes
Channel for providing a request to disclose / LUCH* / SWIFT
Format of a request to disclose / NSD format / ISO Standards
Channel for receiving information from Clients / 1. LUCH
2. In hard copy (with a diskette attached) / 1. SWIFT FileAct
2. Web-access
3. In hard copy
Format of information to be received / NSD format developed in accordance with PARTAD standards / NSD format developed in accordance with the requirements of the Russian Tax Code
Information sender / 1. Client
2. Operator / 1. Client
2. Authorized Tax Representative
Channel for providing reports to Clients / 1. LUCH
2. In hard copy / 1. SWIFT FileAct
Amount of information on securities owners to be disclosed / Determined in a request from the issuer, registrar, or public authorities / As stipulated by the Russian Tax Code
Possibility to provide updated information to NSD after official cut-off / Yes / No.
Mandatory usage of NSD reference lists / Yes / Yes
Additional requirements / Tax residency certificate must be in place
*As there is no English version of LUCH software, disclosure for corporate action could be made via the account operator who may also act as anAuthorized Tax Representative