Last month, after the United States issued additional sanctions against Russia, Bank of America and Nomura Holding's electronic trading unit, Instinet, halted trading of Rosneft and Novatek. Rosneft and Novatek are both major Russian energy stocks, and sanctions against the nation sparked the caution of risk managers.
Four people familiar with the matter told Bloomberg News that trading was halted for two hours on July 16 as a cautionary measure. Nomura also announced a ban on Rosneft and Novatek shares on July 28, that last 24 hours.
Since May, international banks have had issues with sanctions breaches, racking up around $12 billion in fines. BNP was responsible for the vast majority of this, with a $8.9 billion fine for violating U.S. sanctions against Sudan. As the number of international sanctions increase, banks are looking to add new measures to prevent fines. Deutsche Bank is set to add 500 new risk and compliance officers in the U.S. this year.
A trader at another firm told The Wire that Bank of America's concern was completely valid. This particular trader, familiar with the Russian market, felt confident that the compliance and risk managers were acting appropriately given increased sanctions. They also noted that trades could go through, just that they were receiving warning messages and in some cases, required higher levels of sign off in order to complete in full.