The Russian sanctions are beginning to hit home for securities firms with global interests.
(Photo by Tina Hartung on Unsplash.)
As the Russian military further invades Ukraine, aiming for the capital Kyiv, the global economic sanctions are beginning to take hold for securities-trading firms as the financial retaliations impact trading activity and securities operations.
FTF News has been keeping track of the growing list of economic sanctions against Russia via coverage at “SWIFT Expels Key Russian Banks as Hackers Target Wall Street,” https://bit.ly/3v4OJVr
As the sanctions list expands, trading halts are underway via securities exchanges.
For instance, the New York Stock Exchange (NYSE) has been releasing ongoing information about specific trading halts here: https://bit.ly/3sLhqF3 while the Nasdaq Stock Market has been postings its halts here: https://bit.ly/3ME9QnU
Overseas, the London Stock Exchange, citing recent sanctions, market conditions, “and in order to maintain orderly markets … has suspended the admission to trading of the instruments … in accordance with Rule 1510 of the Rules of the London Stock Exchange, with immediate effect. The Exchange will continue to keep this situation under review,” according to an official LSEG statement. Here is a link to a recent market notice: https://bit.ly/35PiTRT
For securities operations, major post-trade services and systems providers such as the DTCC are adjusting daily to the ever-changing sanctions landscape.
During the crisis, the DTCC has been issuing a series of alerts and updates about the impacts of the directives issued by the Treasury Department’s Office of Foreign Assets Control (OFAC). The sanctions are affecting the securities processed via the National Securities Clearing Corp. (NSCC) and DTCC’s subsidiary, The Depository Trust Company (DTC).
The DTCC says that securities that are subject to economic sanctions will likely face service changes in the following areas:
- Clearing
- Transfers
- Settlement
- Asset servicing
- Deposits and withdrawals
- And delivery orders.
In addition to the NSCC and DTC, the DTCC’s Deriv/SERV system has been impacted by the sanctions and “will be blocking or restricting activity in certain Trade Information Warehouse (TIW) accounts in accordance with the applicable user agreements, operating procedures, and law,” according to a recent alert.
“Users with impacted accounts and/or active transactions in the TIW will be contacted directly. We remind you that in using TIW services, you are obligated to comply with all applicable laws, rules and regulations, including any applicable sanctions laws, rules and regulations administered by OFAC and OFSI [the Office of Financial Sanctions Implementation in the U.K.],” according to the DTCC alert.
Customers are urged to contact TIWSupport@dtcc.com for questions and concerns about the Deriv/SERV offerings.
“As a critical market infrastructure, we actively monitor a wide range of global events to assess their potential impact on the financial system and volatility,” according to an official statement from the DTCC. “We are closely watching the situation in Ukraine and are committed to protecting market stability and providing certainty to our clients and the broader industry.”
“DTCC has taken a number of actions based on OFAC sanctions. We remain committed to complying with all OFAC and global sanctions requirements and communicating with impacted clients in a timely and efficient manner,” according to the DTCC.
“We remind you that in using DTCC services, you are obligated to comply with all applicable laws, rules, and regulations, including sanctions laws, rules, and regulations administered by OFAC,” DTCC officials note in their alerts.
The DTCC posts updated alerts here: https://bit.ly/3sKJkRN
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