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This content was produced in Russia where the law

restricts

coverage of Russian military operations in Ukraine

(Rewrites with lawyer comments, background)

MOSCOW, June 3 (Reuters) - A Russian broker on Monday

urged foreign investors to sign up to its asset swap scheme

aimed at freeing up funds blocked by sanctions, although one

lawyer advising Western clients sounded sceptical the plan would

get off the ground.

Investitsionnaya Palata said it was now accepting bids from

foreign-based investors looking to swap frozen assets, having

already collected offers from Russian residents of what they

want to exchange.

Under the plan, foreign investors would use funds frozen in

Russia to buy shares held by Russian investors in the West in

companies like Alphabet, Tesla and Microsoft ( MSFT ). Similar

arrangements would be made in reverse.

Moscow has presented the scheme as a way for both Russian

and foreign investors to free up funds stranded by Western

sanctions and Russian countermeasures since the start of the

conflict in Ukraine more than two years ago.

However, it is unclear whether Western authorities would

cooperate with the asset swaps.

"There is no legal framework for this," said Grigory

Marinichev, a lawyer at Morgan Lewis, adding that only two of

its more than 100 mostly U.S. clients with blocked assets in

Russia had expressed even cautious interest in participating.

"It concerns exchanging one set of blocked shares into

another set of blocked shares. Russia thinks these shares will

suddenly be released, which is a big misunderstanding,"

Marinichev said.

Many frozen assets of Russian investors are held in Europe.

Euroclear, one of the depositories that holds Russian

securities, has said previously it was difficult to assess if

the Russian proposal was doable. It did not immediately respond

to a request for comment on Monday.

Investitsionnaya Palata, which is not under Western

sanctions, said it had received over one million offers from

Russian retail investors looking to take part in the scheme,

with a total securities value of 35.31 billion roubles ($392

million).

"In total, approximately 60% of the foreign securities

included in the pool are shares and depositary receipts of

foreign issuers and approximately 40% are units of

exchange-traded funds (ETFs) composed of foreign shares," it

said in a statement.

The broker has formed 100 lots of securities that can be bid

for. The average value of the lots is 353.1 million roubles.

Bids can be submitted until July 5.

Foreign securities would be credited to special transit

securities accounts should non-residents' bids be accepted, it

said.

Investitsionnaya Palata CEO Alexey Sedushkin told Reuters

last month that he would consider the unblocking of securities

worth 40-50 billion roubles a good result.

($1 = 90.1100 roubles)