The Bank of Russia said it has suspended all trading of the foreign securities and will distribute the frozen assets among traders and their clients. The bank said the suspension was guided by the need to protect the rights and interests of investors and that it will not affect shares of foreign companies whose activities are mostly based in Russia.
The bank put the ban in place because of restrictions on Russian securities trading imposed by Euroclear PLC, the central securities depository for Europe, the St. Petersburg Exchange said on its website on Monday. Euroclear, an international clearing house for securities transactions based in Belgium, is used by financial institutions around the globe.
"As a result, full completion of orders of freely traded securities will be separated from securities that cannot be traded until there is a change in the policy of Euroclear toward Russian depositories," the bourse said in Russian on Monday.
The exchange, the second-largest in Russia, said that owners of the securities will remain the legal owners of all the frozen securities, but will not be able to have access to them. The bourse also said the decision will affect shares with primary listing in the U.S.
The exchange said the decision would not affect the shares of four foreign-listed Russian online platforms. They are Yandex NV — the "Russian Google" — recruitment site Headhunter Group PLC, online retailer Ozon Holdings PLC and Cian PLC, a real estate site.
Bank of Russia, trading participants and the St. Petersburg Exchange are working with foreign counterparts to restore trading of the blocked securities, the exchange said.
The central bank's actions come as the Kremlin has increasingly tried to separate Russia from the global economy. Senior bankers in the country have even suggested that Russia should break away from the Basel III banking regulations.
Moscow also forced Russian companies to return depositary receipts listed on foreign stock markets in April, in an apparent bid to strengthen its own bourses.
The U.K. government has kept up pressure on Russia since the beginning of the war in Ukraine. London has frozen the assets of lenders such as VTB Bank as stock in its British subsidiary dropped off the list of the London Stock Exchange PLC. Westminster has also stripped "recognized status" from the Moscow Exchange, preventing U.K. investors from using associated tax benefits.
At the beginning of the war in February, the central bank banned foreign investors from selling Russian securities and ordered the Moscow Stock Exchange to keep closed, only allowing it to open with a ban on short-selling to protect it from widespread sell-offs.
--Additional reporting by Najiyya Budaly and Matt Thompson. Editing by Ed Harris.
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