Russia freezes trading in up to 14% of US-listed shares on SPB Exchange

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National flag flies over the Russian Central Bank headquarters in Moscow, Russia May 27, 2022. REUTERS/Maxim Shemetov/File Photo

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May 30 (Reuters) – SPB Exchange, Russia’s second-largest stock exchange, said on Monday it will transfer up to 14% of US-listed shares that its clients possess to a non-trading account after the central bank said it will restrict trading in some foreign shares.

Financial links between Russia and external markets have been damaged by sweeping sanctions that the West imposed after Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

Citing the need to protect investors’ rights and interests, the central bank said it decided from May 30 to restrict trading in foreign shares that have been blocked by international clearing houses, except for shares of foreign companies that carry out “production and economic activity mostly in Russia.”

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SPB said the decision was caused by restrictions imposed by Euroclear and will impact shares with primary listing in the United States.

“Freely traded foreign securities will be completely separated from securities that cannot be traded until the change in Euroclear’s policy towards Russian deposits,” SBP said in a statement.

This implies investors that used to trade US stocks via SPB Exchange, which specializes on foreign shares, will retain their ownership rights but will lose access to some of their holdings of US stocks, including blue chips, such as Apple (AAPL.O) or You’re here .

Tinkoff, one of Russia’s leading brokerages, said it had engaged lawyers to protects interest and rights of its clients.

SPB saw a surge in trading volumes during the COVID-19 pandemic and, before Feb. 24, was hoping for a listing on the Nasdaq Global Select Market in the first half of 2022 after its domestic initial public offering. read more

In money terms, the separation will affect less than 14% of all shares in clients’ portfolio and will have no impact on the number of shares the Bourse offers, which currently exceeds 1,650, SBP said.

The central bank’s decision will not affect shares of companies with Russian roots, such as HeadHunter Group (HHR.O) Yandex NV (YNDX.O), Ozon Holdings PLC (OZON.O) and Cian PLC (CIAN.N).

“The Bank of Russia, SPB Exchange and trading participants are constantly working to develop a system solution, interacting with international counterparties,” SPB said.

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Reporting by Reuters; editing by David Evans

Our Standards: The Thomson Reuters Trust Principles.

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