Why Has Russia Halted Trade up To 14% of US-Listed Stocks?

The central bank announced that trading in some foreign shares would not operate; hence, the SPB Exchange said that it would move up to 14% of its customers’ U.S.-listed shares to a non-trading account.

Moscow launched tens of thousands of troops into Ukraine on February 24. This caused massive sanctions from the West that has harmed Russia’s financial linkages with global markets. The central bank said it decided on May 30 to restrict trading in foreign shares that international clearing houses have blocked. Except for shares of foreign firms engaged in “production and economic activity primarily in Russia,” which are exempt due to the necessity to safeguard investors’ rights and interests.

SBP Decision and its Impact on Investors

The decision came from Euroclear regulations, according to SPB. It would affect shares having a main listing in the United States. “Until Euroclear’s attitude regarding Russian depositories changes, freely traded foreign assets will be isolated from securities that cannot be traded,” SBP stated in a statement. Investors who used to trade U.S. equities on the SPB Exchange will keep their rights; however, they will lose access to certain of their U.S. stock holdings; including blue chips like Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) (NASDAQ: TSLA).

Tinkoff, one of Russia’s most well-known brokerages, said it had hired attorneys to safeguard its client’s interests and rights. SPB witnessed a spike in trading activity during the COVID-19 epidemic; it was looking for a Nasdaq Global Select Market listing in the first half of 2022 after its domestic IPO before February 24. According to SBP, the split would affect fewer than 14% of all shares in customers’ portfolios. It will not affect the number of shares the bourse presently offers, around 1,650. The central bank’s decision will have no impact on shares of Russian-based firms such as HeadHunter Group Yandex (NASDAQ: YNDX) N.V., Ozon Holdings PLC, and Cian PLC.