Galery

1

The Athens Stock Exchange will reopen on Monday, 3 August, after more than a month's holiday. This will be a two-speed market: once speed for Greek investors, and another for foreign ones.

As expected, a decree of the Finance Minister, Efklidis Tsakalotos, imposes severe restriction on the use of existing bank deposits for the purchase of shares by Greek investors. New accounts will be created, for depositing fresh capital for the purchase of shares. Foreign investors will have a free hand.

A complete ban is also imposed on the repurchase of mutual fund units, which cannot be converted into cash and represent "fresh money." This policy is designed to avoid problems in the banking sector in the event of mass redemptions.

Capital increases - through existing deposits as well

Using  Greeks' deposits to increase the capital of banks, as well as of any company listed on the stock exchange, will be allowed.

The ministerial decree allows the transfer of capital into Greece with the aim of acquiring newly issued shares within a capital increase or an issue of bonds and debentures of any kind by credit institutions domiciled in Greece for their recapitalization.

Possibilities of using deposits

The possibility of using existing deposits has been granted mainly for the purposes of raising money that will limit potential turmoil on the stock exchange and will avert the risk of systemic instability.

Thus, as an exemption from the prohibition on transfer of capital by banks for the purchase of stocks, bonds, etc., transfers are allowed for the following purposes:

- clearing, including margin management and negotiating transactions to end users; transaction costs are also included;

- payment of shares, interest, return on capital and other contributions by listed companies or by bond issuers;

- purchase of shares, bonds or opening positions; the account of the investor or customer of the exchange company / bank should be credited with fresh capital after the ministerial decree comes into force, to at least the same amount as the clearing transaction;

- payment of liabilities under the clearing and settlement of specially negotiated transactions on the Greek stock exchange, to cover failed trades, as well as the obligations to provide margins. This is considered important because investors will be able to transfer funds from their accounts to cover cash stocks or positions;

- transfer of positions into derivatives if necessary to cover the daily or final clearing in cash (mark-to-market);

- covering margin deficits of  security portfolios (shares, bonds, shares, bought on credit, etc.).

- payment of  capital  transfer orders issued prior to the bank holiday's entry into force (June 28) to collective investment organisations licensed by the Securities Commission, or to mutual funds unit-linked within savings programmes/accounts.

To enable the reinvestment of funds that are invested in shares abroad, it is allowed to transfer capital even overseas, by banks to collective investment organisations, investment companies, alternative investment organisations, social security companies,  occupational retirement funds, insurance organisations and social security institutions. Reinvestment will apply mainly to funds from the sale of financial instruments on foreign markets.