Reuters reported on the 7th (local time) that the U.S. Treasury Department has banned money managers from purchasing Russian bonds and stocks through the distribution market in the country.
It was added to the existing clause banning newly issued bonds and stocks as part of financial sanctions against Russia that invaded Ukraine.
Despite the strong U.S. sanctions against Russia, Americans were allowed to trade hundreds of billions of dollars worth of Russian financial assets through the distribution market.
However, on the 6th, the Treasury Department posted a new sanctions guideline on its website and confirmed that the ban would be extended to all Russian bonds and stocks. It did not specify a specific company name.
“We have made it clear that Americans are prohibited from investing in Russia, including in the distribution market,” a Treasury spokesman said on the 7th. “This is in line with our goal of blocking access to financial resources needed to continue the brutal war in Ukraine.”
According to Reuters, the guidelines allow U.S. investors to continue holding or selling Russian assets already held. In addition, it is still possible to purchase U.S. funds, including Russian bonds or stocks, Reuters said.
Western funds have already sold huge Russian assets since the outbreak of the Ukrainian war. According to Morgan Stanley, Russian government bonds and corporate bonds, which increased in the international capital market, exceeded $472 billion at the beginning of the year. Russia was the emerging market with huge asset liquidity after Mexico, Indonesia, and Turkey. However, the amount of money that comes and goes from Russia’s major stock exchanges to 35 trillion roubles (about 588.2 billion dollars), down from 50 trillion roubles in January.
“In the meantime, stocks such as Russian Energy Corporation Luke Oil have been traded very actively, but now they will not be able to trade through U.S. accounts,” said Himanshu Powal Emerging Market Credit Analyst at Seaport Global.
