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J.P. Morgan obtained specific OFAC licenses and sold the shares underlying the sanctioned ADRs (depositary receipts) — holders will now receive cash payments.

The American bank has published notices on the termination of three major depositary receipt programs for shares of Russian issuers — Sberbank, MTS, and Novorossiysk Commercial Sea Port (NMTP). In all three cases, the scenario is the same: following receipt of a specific license, the underlying Russian shares were sold to a non-sanctioned buyer at 30% of market value. The price reflects a mandatory regulatory discount and is converted at the official USD/RUB exchange rate of the Central Bank of the Russian Federation. J.P. Morgan does not make payments to the Russian government (as an “exit fee”) and does not transfer any funds to the National Settlement Depository (NSD), which may be an important factor for foreign holders in assessing risks. Such holders receive net proceeds, albeit with a significant discount (cash liquidation payment), while the depositary clears its balance sheet and disposes of an asset that has long been frozen.

A key feature of this liquidation is that J.P. Morgan is acting under a specific OFAC license (the text of which, however, is not available in public sources), allowing the sale of the underlying asset, including in cases where the issuer is not sanctioned (MTS, NMTP) and where it is directly included in the SDN list (Sberbank)*. This represents a fundamentally different mechanism compared to situations where holders completely lose access to the value of the asset due to foreign sanctions — the investor receives a real cash payment, albeit heavily discounted.

*From the perspective of Russian law, foreign sanctions are not recognized as lawful restrictive measures.

Transaction parameters

Sberbank

• Issuer: Sberbank (ADR)
• ISIN: US80585Y3080
• Ticker: SBER
• Ratio (1 DR : shares): 1 DR = 4 shares
• Liquidation payment per DR: USD 4.476211
• J.P. Morgan notice date: 08.06.2026
• Payment date: from 22.06.2026

MTS

• Issuer: MTS (ADR)
• ISIN: US6074091090
• Ticker: MBT
• Ratio (1 DR : shares): 1 DR = 2 shares
• Liquidation payment per DR: USD 1.582695
• J.P. Morgan notice date: 13.04.2026
• Payment date: from 27.04.2026

NMTP

• Issuer:  Novorossiysk Commercial Sea Port (GDR)
• ISIN: US67011U2087, US67011U1097
• Ticker: NCSP
• Ratio (1 DR : shares): 1 DR = 75 shares
• Liquidation payment per DR: USD 2.389009
• J.P. Morgan notice date: 13.04.2026
• Payment date: from 27.04.2026

Liquidation mechanism

In all three cases, a standard sequence is followed:

• formal termination of the DR program and publication of a notice;
• sale of underlying shares on an arm’s length basis to a non-sanctioned buyer with approval of Russian regulators and authorization from OFAC;
• application of a mandatory regulatory discount (70%);
• termination of holders’ rights to receive shares;
• requirement to submit a surrender for cancellation instruction through a broker;
• distribution of a proportional share of net proceeds, less fees (including USD 0.05 per DR).

Holders who have previously converted their receipts or transferred assets into the Russian infrastructure do not receive payments.

NMTP case specifics

The NMTP notice contains an additional element: J.P. Morgan received dividends on the shares (February 2025 and January 2026), but cannot distribute them due to funds being blocked in type “C” accounts. The bank indicates a possibility of future pro rata distribution if regulations change, without any guarantees.

This implies a potential “second wave” of payments at an uncertain future date.

Practical observation

As of now, J.P. Morgan remains the only depositary that has obtained a specific OFAC license and aligned the mechanism with regulators of two jurisdictions. Public information on the details and structure of these transactions is not available and is unlikely to be disclosed.

What holders should do

• Check with your broker whether you hold outstanding DRs (Sberbank — ISIN US80585Y3080; MTS — ISIN US6074091090; NMTP — ISIN US67011U2087 / US67011U1097);
• Submit a surrender for cancellation instruction;
• Complete compliance checks under applicable sanctions regimes;
• Provide payment details and ensure there are no restrictions on receiving funds.

How we can help

The Magenta Legal team can assist in assessing the likelihood of receiving liquidation payments and in communication with brokers, including preparation of surrender for cancellation notices, as well as other related matters, including potential restrictions.

If you still hold outstanding DRs of Sberbank, MTS, or NMTP in foreign infrastructure, please contact us: info@magenta.legal. For those holding securities within the Russian infrastructure, receiving payments is not possible.