Discounts applied upon liquidation of shares (underlying ADRs)

After the liquidation of the Sberbank shares underlying the ADR-program, various investors seem to wonder what the background is of this discount. Decree No. 81 of the President of the Russian Federation dated March 1, 2022, "On Additional Temporary Economic Measures to Ensure the Financial Stability of the Russian Federation" (Decree No. 81; https://www.consultant.ru/document/cons_doc_LAW_410578/ ) established a special procedure for the execution of transactions involving securities between residents of the Russian Federation and "persons of foreign states committing unfriendly acts". According to the general rule stipulated by Decree No. 81, transactions involving securities between residents of the Russian Federation and "unfriendly persons" are only possible with the permission of the Government Commission for the Control of Foreign Investment in the Russian Federation (the Government Commission). The minutes of the Government Commission meeting of th...

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 close-out rule and ordered IB to refund these charges and to stop charging any future charges until the position can be closed. In addition IB was ordered to pay £200 for the distress caused.

The full decision by the Financial Ombudsman can be found here: https://www.financial-ombudsman.org.uk/decision/DRN-5843228.pdf

Earlier we wrote about other cases where investers were ordered compensation from the UK and Dutch Financial Ombudsman: https://news.eahciss.org/2026/02/compensation-from-brokers-for-failed.html