Iceland: Next steps in capital account liberalisation - Central Bank of Iceland announces foreign currency auction
On Sunday 21 May 2016, the Icelandic Parliament passed a bill of legislation into law which addresses the treatment of Króna-denominated assets subject to special restrictions, also referred as to offshore Króna assets held with foreign investors.
This will result in the Central Bank of Iceland holding an auction in which owners of offshore Króna will be given the option of exchanging their offshore Króna assets for Euros. The detailed definition of the offshore Króna assets can be found on the Icelandic Ministry of Finance website.
Clearstream Banking will facilitate participation to this auction for its customers holding such offshore Króna assets. Although participation at the auction is voluntary, it is foreseen in the bill that those offshore Króna assets that would not take part in the Central Bank auction will be subject to certain restrictions.
The auction is expected to take place on 16 June 2016. The exact terms and conditions of the auction are expected to be confirmed and made available within the next week. A detailed announcement will be published as soon as confirmation from the Central Bank of Iceland has been received.
We continue to monitor the situation in the Icelandic market and will provide further information as it becomes available.
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