Beginning October 1, the Bank of Russia will apply restrictions on retail investors’ access to shares from companies listed in countries the nation deems as ‘unfriendly’ for imposing sanctions against Moscow for its war in Ukraine.
The instruction, which was announced on Tuesday, aims to minimize the exposure of retail investors to Western sanctions. Millions of Russian investors have reportedly had their foreign securities frozen.
“This decision is aimed at minimizing the infrastructure risks faced by non-qualified investors, since foreign financial institutions maintaining the record of such securities may block the opportunity to dispose of purchased assets without any warning,” the bank said in a statement.
The restrictions will come in tiers from October to January. From October 1, retail investors will no longer be allowed to buy foreign securities from brokerages if their portion of a portfolio goes over 15%. Beginning November 1, the threshold will be decreased to 10% of a customer’s portfolio, and then down to 5% beginning December 1.
Beginning January next year, “brokers will have to suspend the execution of any orders of non-qualified investors to increase their positions in securities of foreign issuers from unfriendly countries.”
In July, Russia expanded its list of ‘unfriendly’ countries to 48. The list includes the US, the European Union, the United Kingdom, Canada, and Japan.
Information for this briefing was found via the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.