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Showing posts with the label Sanctions

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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Lobby success: exception from EU transaction ban on Sberbank, VTB and other banks for payment of dividends

Last year the EU introduced a transaction ban with several Russian banks, including Sberbank (see article 5h of Regulation (EU) 833/2014). After the transaction ban was imposed EAHCISS established contact with the head of the financial sanctions unit within the European Commission ( https://news.eahciss.org/2025/07/impact-of-eu-sanctions-on-eu-investors.html ). The correspondence spread over many months during which we reiterated and explained our request to add a 'prior contract' exception. In April 2026 this exception was added to the EU sanctions regulation (under paragraph 22 of article 1 of Council Regulation (EU) 2026/506 of 23 April 2026 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine). The shareholder agreement is such prior contract that establishes the legal basis for the payment of dividend payments from an enitity that is subject to the transaction ban.
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Impact of EU sanctions on EU investors

On the 18th of July 2025 the Council of the European Union introduced a transaction ban with many Russian financial institutions, including Sberbank. EAHCISS is concerned about the impact this transaction ban may have on European investors that cannot avoid transactions with these Russian financial institutions due to (automatic) dividend or interest payments. Today we sent a letter to the Council of the European Union and the responsible department within the European Commission (Directorate-General FISMA) to express our concerns. The full letter can be read via this link: https://drive.google.com/file/d/140ybZCyVZLWnwDPhg32ad09VVpvFMPqT/view?usp=sharing
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