Saxo Bank decided to stop working with Russians

Saxo Bank has warned Russian clients to stop servicing their brokerage accounts due to sanctions. Within two months, investors must either close all positions and withdraw money,

Clients from RUSSIA who opened brokerage accounts with the Danish Saxo Bank received notices of their closure from June 6, 2022. Copies of letters were published by the broker's clients in profile chats.

The same restrictions apply to citizens of Belarus, investment consultant Alina Ananyeva, who received an explanation from Saxo Bank, told RBC. If citizens of Russia or Belarus have residency in one of the EU countries, their accounts will not be closed, she specified. Accounts of investors from other CIS countries (Kazakhstan, Ukraine, Azerbaijan, etc.) will continue to be serviced as before, she noted. RBC sent a request to Saxo Bank.

US broker warns Russian clients about account blocking risks

In a letter to customers, Saxo Bank says it is “forced to exercise its right to stop working” with them due to sanctions imposed on Russia. Accounts will be closed from June 6, 2022, until that time users will be able to withdraw funds, close positions or transfer securities to any broker, the letter states. But such transfers are “subject to additional due diligence or counterparty restrictions,” which would increase processing time or prevent such requests from being fulfilled, Saxo Bank warned. "In some cases, it may be easier to close positions and simply transfer cash instead of securities," the letter to clients explains.

Saxo Bank clients will not be able to open new positions in the next two months or increase current ones and then transfer them to another broker: this functionality has been limited for them since April 8, 2022, follows from the letter. Starting from the same date, if the value of the client account exceeds €100,000, Saxo Bank will create a separate account and transfer all funds exceeding this threshold to it, the letter says. “Any potential increase in cash in the future will be transferred daily to a separate account,” Saxo Bank emphasized. In February, the European Union imposed restrictions on the amount of funds in banks for Russians - credit institutions that it regulates are prohibited from accepting deposits from them in excess of €100,000 (per bank).

If clients from Russia do not close positions in Saxo Bank and withdraw funds by June 6, the bank will do it on its own. The money in this case will be transferred to the last account that was used to replenish the brokerage account with Saxo Bank, the letter states. “In the event that this account is no longer valid, any fees charged for refunds will be deducted from your account,” the bank emphasized in a message to customers.

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At the end of February, the American company Interactive Brokers warned about the risks of blocking customer accounts due to sanctions, while it does not stop working with Russians. In a letter sent to investors from Russia, as well as from the Donetsk and Lugansk People's Republics, the American broker admitted the possibility of blocking their accounts or transactions, "including depositing and withdrawing funds" (meaning not the decision of the broker himself, but the sanctions that he must comply). IB also urged clients to consider the possibility of "technical blocking of the international Internet infrastructure, which will affect the ability to access accounts." At the same time, IB announced that it would no longer be liable for losses that its Russian and Ukrainian clients may incur.

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The European broker Exante, founded by Russians and registered in Malta, has banned residents of Russia and Belarus from withdrawing funds in US dollars and Russian rubles. All other currencies remain available for use "unless the bank is under sanctions." The broker no longer accepts deposits from them from any banks in any currencies and does not process securities transfers from Russian brokers, both incoming and outgoing.

Neither IB, nor Exante, nor Saxo Bank are licensed by the Bank of Russia. This means that their clients in Russia are not subject to the regulation of the Central Bank. At the same time, they were still focused, among other things, on working with the Russians. The same Saxo Bank, until recently, had information in Russian on its website, and its managers and analysts held events in Russia.