One of the largest US brokers starts closing accounts for Russians with European residence permits
7 November 10:51
Interactive Brokers, an American company, has warned Russians with residence permits in the European Union to close their accounts within 30 days. The notifications began to be sent to clients in early November, according to Komersant ukrainskyi reports news agency, citing Russian media.
Among those who have received the notification are even clients who pay taxes in European jurisdictions, a representative of a large Russian brokerage company said.
Russian law firms confirmed this information. According to them, the closure of accounts also affected Russians with residence permits in Kazakhstan and the UAE. In its newsletter, Interactive Brokers explained the decision by its internal policy and offered clients to transfer assets to another broker or close positions and withdraw funds. At the same time, it is no longer possible to enter into new transactions.
Accounts that are subject to liquidation are marked as Closing Only. Money can be transferred to another broker through the automatic ACATS system, which is similar to the US Securities Depository Institutional Transfer System. To do this, the client needs to contact the chosen company and submit a transaction request. Interactive Brokers emphasized:
“If you do not close or transfer all positions in the account within 30 days of this notice, we reserve the right to liquidate the remaining positions in the account, credit the liquidation proceeds to your account, or distribute them in accordance with your most recent withdrawal instructions.”
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Lawyers believe that the new wave of closures of Russian accounts at the largest US brokerage is related to the expansion of US blocking sanctions on October 30. More than 30 individuals and more than 360 companies were added to the sanctions list. Lawyers warn that it will be very difficult to transfer assets and withdraw funds from the United States. Eventually, all clients with Russian citizenship may face similar restrictions.
Experts believe that similar measures may soon be implemented by financial organizations in Europe and Switzerland. Recently, banks and brokers from countries that are considered “unfriendly” have been making decisions based not only on regulatory restrictions but also on internal risk assessments. In this case, it may be unprofitable for companies to retain clients with Russian citizenship, as it requires additional checks and significant resources for compliance, legal and administrative support.
Interactive Brokers began to impose restrictions on Russians after Russia’s full-scale invasion of Ukraine. In particular, the broker banned replenishment of accounts in rubles, as well as opening new positions with EU securities, blocked transactions with euros for Russian clients and announced the closure of accounts with low activity. This summer, Interactive Brokers banned Russian investors from depositing funds in 12 currencies, including Chinese yuan, Turkish lira, and Japanese yen.
