Compensation from broker for Russian CFD (contract for difference)

The UK Financial Ombudsman has ordered Interactive Brokers (IB) to compensate an investor that invested in a Russian CFD (contract for difference). In this case the CFD was for 10.000 Sberbank ordinary shares. Interactive Brokers refused to close the position because they could not trade the underlying Sberbank shares Interactive Brokers had bought to cover the CFD contract. From March 2022 onwards, IB raised the margin required for the position to 100%. By August 2024 the interest alone charged on the position had amounted to around USD $12,000.  The European Securities and Markets Authority (ESMA) introduced a margin close-out rule in 2018 that states that CFD providers have to close positions once the net asset value in the investor's account drops to 50% of the required margin. The Financial Ombudsman ruled that Interactive Brokers was required to stop charging interest and other charges on the CFD position once they had to close the position on the basis of the ESMA 50% margin...

Reuters article on the unblocking of funds by Euroclear

Reuters published an article today on the unblocking of funds by Euroclear.

This unblocking of funds is essentially part of an asset swap. Under Russian legislation NSD used the money in Euroclear's type C account to pay / compensate Russian investors for dividend and bond payments that were frozen in NSD's account in Euroclear. Now Euroclear is using these frozen funds to compensate Western investors for the money NSD took out of Euroclear's type C account in Russia.

We will post a more extensive post on the Telegram channels over the coming days.