Market participants are still scrambling to understand a notice from the U.S. Treasury Department banning all U.S. investors from buying Russian debts, which has shut down trading in parts of the bond market, the Wall Street Journal reported. The guidance says U.S. investors aren’t allowed to buy any existing debt or equity issued by an entity in the Russian Federation, and they can only transfer or sell those assets to non-U.S. persons. Banks with a substantial U.S. presence have halted most trading in Russian corporate and sovereign bonds and are seeking clarity from Treasury’s Office of Foreign Assets Control, which manages sanctions policy. Trading levels in those bond markets were already running thin since Russia’s war in Ukraine began in February, but now they have tapered off further, according to investors. While Monday’s guidance only targets entities in Russia, Treasury also said that investors aren’t allowed to make new investments in a company whose revenues are “derived from its investments in the Russian Federation.” Some uncertainty surrounded whether the Treasury ban encompasses Russian companies that issue debt from jurisdictions such as Ireland, Luxembourg and the Netherlands.
