The second-largest stock exchange in Russia, SPB Exchange, said on Monday that it would move up to 14% of its clients’ U.S.-listed shares to a non-trading account after the central bank said it would limit trading in some foreign shares.
Wide-ranging sanctions that the West put in place after Russia sent tens of thousands of troops into Ukraine on Feb. 24 hurt Russia’s financial ties to the rest of the world.
In order to protect investors’ rights and interests, the central bank decided on May 30 to limit trading in foreign shares that have been blocked by international clearing houses, except for shares of foreign companies that do “production and economic activity mostly in Russia.”
SPB said that Euroclear’s rules led to the decision, which will affect shares that are listed first in the United States.
SBP said in a statement, “Freely traded foreign securities will be completely separated from securities that can’t be traded until Euroclear changes its policy toward Russian depositories.”
This means that investors who used to trade U.S. stocks through SPB Exchange, which specializes in foreign shares, will keep their own rights but lose access to some of their U.S. stocks, including blue chips like Apple (NASDAQ: AAPL) or Tesla (NASDAQ: TSLA).
Tinkoff, one of the most important brokerages in Russia, said it had hired lawyers to protect its client’s interests and rights.
During the COVID-19 pandemic, SPB’s trading volume went up. Before February 24, the company was hoping to list on the Nasdaq Global Select Market in the first half of 2022, after its domestic IPO.
In terms of money, the separation will affect less than 14 percent of all the shares in clients’ portfolios. It will also have no effect on the number of shares the bourse offers, which is currently more than 1,650, said SBP.
The decision of the central bank won’t have any effect on the shares of Russian-based companies like HeadHunter Group, Yandex (NASDAQ:YNDX) N.V., Ozon Holdings PLC, and Cian PLC.
SPB said, “The Bank of Russia, SPB Exchange, and trading participants are always working on a system solution by talking to international counterparties.”
