The concern surrounding the fate of Russian brokers is not just a matter of idle curiosity for our readers. As it stands, local investment companies in the Kyrgyz market have not yet expanded enough to offer retail clients access to international markets. Consequently, citizens looking to invest their savings in Apple, Amazon, Facebook, and other lucrative stocks often turn to Russian brokers like ATON, BCS, Alpha, Tinkoff, and others. Until recently, this was a logical choice.
The Russian financial industry experienced significant growth in the early 2000s, thanks to an influx of foreign investment banks and the adoption of Western business standards. At the beginning of last year, Russia boasted one of the most impressive exchanges in Eurasia – the Moscow Exchange – along with the top central depository (NSD + NCC) and cutting-edge brokerage firms that managed billions of dollars in client funds domestically and pursued aggressive global expansion. Brokers with Russian roots emerged in Cyprus, the United Arab Emirates, London, Hong Kong, New York, and beyond, with the most reputable among them earning international reliability ratings.
However, Russia’s military operation in Ukraine, which began on February 24th last year, sent shockwaves across a Europe accustomed to peace. In response, sanctions were imposed on Russia, indiscriminately affecting both military-related and civilian businesses, as well as ordinary investors.
One year after the start of hostilities, the Russian brokerage services sector for international markets has been decimated. Russian brokers have largely lost access to foreign securities, as European depositories Euroclear and Clearstream have frozen the accounts of the Russian National Settlement Depository along with tens of billions of dollars» worth of Russian client securities. In retaliation, the Russian government has restricted the movement of «unfriendly» securities within the country.
Once-proud international brokerage companies with Russian roots, which had previously touted their unique access to the Russian stock market, now actively distance themselves from Russia, removing all mentions of the country from their websites and presentations. For some, this wasn’t enough, as they found themselves subject to international sanctions that completely froze their operations and client assets. Others opted to shut down their operations, unable to withstand the sanctions pressure on key clients and the widespread asset freezing-induced paralysis of settlements.
Nevertheless, a number of Russian brokers continue to trade in foreign securities through their official and unofficial foreign divisions. However, the foreign securities that investors had previously acquired through their Russian parent structures are largely frozen, especially if they were accounted for through the NSD depository.
It remains uncertain whether the current situation will persist, if the remaining connections between Russia and external stock markets will be severed (e.g., the ability to buy American securities through St. Petersburg), or if the foreign subsidiaries of Russian brokers that have not yet been affected by sanctions will fall under a new wave of restrictions (our experts unanimously agree that sanctions pressure will increase).
Russian banks under sanctions (as of 15 March 2023)
Sberbank *
VTB *
Promsvyazbank *
Alfa Bank *
Tinkoff
Sovcombank *
«Opening» *
Gazprombank
Rosselkhozbank
Novikombank *
Bank Russia
UBRD *
SDM Bank *
CMR-bank
Roseximbank *
RFK Bank *
Transcapitalbank *
Investtorgbank *
Industrial Savings Bank
Black Sea Development Bank *
Industrial Savings Bank
Genbank *
RNKB
SMP Bank *
MTS Bank *
Sovcombank *
BM-Bank *
IS-Bank *
Setelem Bank (Drive Click) *
Mosoblbank * Far East Bank *
Rosbank *
Moscow Credit Bank (MCB)
Uralsib *
Zenith*
Bank «Saint-Petersburg *
Lanta Bank *
Metallinvestbank *
Bank Primorye *
SDM-Bank
Left Bank *
Eurofinance Mosnarbank *
Mir Business Bank *
* — the most severe sanctions (SDN list)
Russian brokers under sanctions:
VTB My investments
Sberbank Investments
Opening Investments
Alpha Investments
Sovcombank Investments
PSB Investments
Tinkoff Investments
Rosbank invest
MKB Investments
MTS Bank (as a broker)
Uralsib broker
Veles Capital
Russian brokers not under sanctions (as of 15 March):
Finam
BCS World of Investments
Digit broker (formerly Freedom Finance)
Newton Investments (formerly GPB Investments)
Aton
ITI Capital
Kit Finance
BC Region
Solid Broker
Broker CB «Renaissance Credit»
Investment Chamber
International Brokers with Russian Roots: Fragments of the International Expansion of the Russian Investment Industry:
CYPRUS
• Alfa Capital Markets Ltd (part of Alfa group, under EU sanctions since 02/27/2023)
• GPB Financial Services Ltd (subsidiary of Gazprombank; Gazprombank under US sectoral sanctions)
• Otkritie Broker Ltd (part of the Russian Otkritie group, US sanctions from 2.03.2022)
• SIB (Cyprus) Ltd (subsidiary of Sberbank of Russia; Sberbank under US payment sanctions)
• Veles International Ltd (under US sanctions since February 24, 2023, together with the Russian company Veles Capital and its owners)
• Atonline Ltd (Russian group Aton)
• Brokercreditservice (Cyprus) Ltd (Russian group Brokercreditservice)
• Omega Funds Investment Ltd (owned by the former manager of the Russian IR Region)
• Renaissance Securities (Cyprus) Ltd (Russian group Renaissance)
• Ronin Europe Ltd (associated with the Russian company Ronin Trust)
• Skanestas Investments Ltd (owned by former manager of Promsvyazbank)
• Solid Financial Services Ltd (Russian group Solid)
• Lime Trading (CY) Ltd (formerly JUST2TRADE ONLINE LTD, part of the Russian group Finam)
GREAT BRITAIN
• ITI Capital Limited (closes retail business from April 2023)
• BCS Prime Brokerage Ltd.
• SOVA (former Otkritie Broker, main owner — Roman Avdeev) Since March 2022 under bankruptcy proceedings
USA
• BCS America (Brokercreditservice group)
UAE
• ACM Limited (Abu Dhabi), ATON Group
Alternative brokers for the global market
Where should those who want to invest in the global financial markets go now?
If English is not a problem, and the origin of the capital is reliably documented by tax returns (not from Russia!), You can try opening an account with one of the largest international brokers. The largest and most effective of them are concentrated in the USA; the total capital of their clients is hundreds of billions of dollars.
Top Global Brokers
• Charles Schwab (USA)
• Fidelity Investments (USA)
• E*TRADE (USA)
• TD Ameritrade (USA)
• Vanguard (USA)
• Bank of America / Merrill Lynch (USA)
• Interactive Brokers (USA)
• Saxo Bank (Denmark)
If you want to stay in the Russian-speaking environment, you can open a brokerage account in one of the brokers of the CIS countries: Kazakhstan, Georgia, Armenia. We have compiled a list of the most popular brokers in these countries that are ready to work with non-residents.
Kazakhstan
• Freedom Finance
• Kazkommerts Securities
• Halyk Finance
• BCC Invest
•Jusan Invest
• Kazpost
Georgia
• TBC Capital
• Galt & Taggart
Armenia
• Ameria Global Trading (from Ameria Bank)
• Evocabank
• ACBA Bank
What about here in Kyrgyzstan?
In our country, the retail market for access to global investment opportunities is still in its early stages. As of now, we have not identified a single licensed professional securities market participant that offers these services to retail (mass) clients.
In 2021, Taigan Capital announced its intention to enter the retail market for trading foreign securities. However, according to industry insiders, the company’s venture did not take off. At the time of writing this article, Taigan Capital’s corporate website was inaccessible.
To the best of our knowledge, several Kyrgyz brokerage firms have access to foreign securities markets. However, none of them currently cater to retail clients. Their services are exclusively designed for large investors (family offices) or affiliated companies.
Alexei Gorin
