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Showing posts with the label Forced transfer

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...
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Update on Russian case law regarding forced transfer and unpaid dividends

In this post we provide a first update on recent Russian court decisions. These court decisions were kindly provided by Irina Sibirina from the legal firm Itlektis.ru . More case law on Sberbank securities will follow soon. Case 1: Forced transfer of Rosneft shares and unpaid Rosneft dividends The first case involves an investor, mr. Gubaev, that bought Rosneft shares via the Swiss CBH Bank (the case materials speak in one section about directly buying ordinary shares but refer to converted depositary shares in another section). He applied to get his ordinary shares forcefully transferred from CBH Bank to his Russian brokerage account with ATON. According to the court materials, the chain of custody involved The Belgian Branch of Bank of New York Mellon and Citibank Russia. The Russian appellate court ruled in October 2023 that Citibank Russia had wrongfully denied the request for a forced transfer and ordered Citibank Russia to carry out the forced transfer. The full case materials ...
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