Russia will restrict retail investors from buying foreign shares from 'unfriendly' countries that have sanctioned the nation

Retail investors' purchases of securities in companies from countries that have imposed sanctions against Moscow will be restricted by the central bank.

The Bank of Russia said the move was to mitigate risks. Millions of Russian investors saw their holdings of foreign securities frozen.

If the portion of the investor's portfolio exceeds 15%, the bank will no longer execute orders from non- qualified investors to buy securities from unfriendly countries.

On November 1 and December 1 the threshold will be lowered. Retail investors will no longer be allowed to increase their stakes in foreign issuers from unfriendly countries.

Since foreign financial institutions may block the opportunity to dispose of purchased assets without any warning, the Bank of Russia decided to make this decision.

Five million people have become victims of such blocking. It is difficult to protect the rights of holders of these securities as the solution of the problem is outside of Russian jurisdiction.

The US, European Union nations, Canada, and Japan were among the countries that were unfriendly to Russia.

According to the central bank, Russians held about 14 billion dollars in US listed shares at the end of March. According to the report, the Bank of Russia estimated that sanctions on Russia's National Settlement Depository had frozen access to over five billion dollars in foreign shares.