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...

Explainer video by Magenta Legal on Forced Conversion of Ozon Depositary Shares

From the 1st of December 2025 "Reestr Proton", the new Russian registrar of Ozon, will start accepting applications for the forced conversion of depositary shares of Ozon. Ozon recently underwent redomiciliation from Cyprus to Russia. Applications for forced conversion can be submitted until the 31st of March 2026. 

It is likely that this may be the only chance for holders of depositary shares to convert their depositary shares of Ozon into ordinary shares. If one does not participate in the current procedure the ordinary shares underlying the depositary receipts may well be liquidated for a discount once the depositary bank BNY may be able to do so.

Magenta Legal recently published a video in which they explain the process. EAHCISS may organise a webinar on this topic too to help investors navigate the fairly complex procedure of forced conversion.

The video by Magenta Legal can be viewed via YouTube: