SPB Exchange withdraws itself from the list of ITS Exchange shareholders

According to the press service of the SPB Exchange, a Russian exchange that has been targeted by U.S. sanctions, it will exit the list of shareholders of the ITS Exchange in Astana, Kazakhstan.

«We kept in mind that the U.S. could impose sanctions against the SPB Exchange, a minority shareholder of ITS. The algorithm of actions in this scenario was part of the ITS charter. This means that any sanctioned shareholder should quit the capital of ITS,» the company said in a statement.

On November 2, the U.S. government introduced blocking sanctions against the SPB Exchange. After that, the platform, which specializes in providing access to foreign securities, announced the suspension of trading. They are scheduled to resume on November 6.

The Office of Foreign Assets Control (OFAC) under the U.S. Department of the Treasury has issued a general license for foreign partners and counterparties of the SPB Exchange, ordering them to stop any business relations with the Russian exchange by January 31, 2024. Because of sanctions, transactions with securities of American public companies and settlements in U.S. dollars will be impossible on the exchange since its correspondent accounts in U.S. banks will be blocked.

At the same time, the exchange said that the U.S. sanctions won’t affect its customers, although it’s not clear what may happen to investors’ assets traded on the platform. According to experts interviewed by the Russian RBC, holders of securities and derivatives can face some troubles if the U.S. imposes sanctions on SPB Bank which is owned by the exchange and acts as a depository for the platform. The expert also noted that assets of European issuers are unlikely to be blocked because European depositories aren’t obliged to comply with U.S. sanctions.

ITS has been operating within the Astana International Financial Center (AIFC) since June 7, 2023. The platform specializes in providing access to trading in the most liquid shares on the global market. Apart from SBP Exchange, a minority shareholder, the other two shareholders of ITS are Freedom Kazakhstan and the Foundation for the Support and Development of the International Financial Center. At the end of September, ITS reported a 62% increase in trading volume and a 57.2% increase in October.