Britain said on Tuesday it planned to revoke the Moscow Stock Exchange’s (MOEX) status as a recognized stock exchange in response to Russia’s invasion of Ukraine, a move that would remove some tax relief for new investors.
Britain and other Western allies are searching for new ways to increase pressure on Russia following its invasion of Ukraine, targeting wealthy elites and key industries as well as trying to cut off access to the international financial system.
“Revoking Moscow Stock Exchange’s recognized status sends a clear message – there is no case for new investments in Russia,” Britain’s Financial Secretary to the Treasury, Lucy Frazer, said in a statement.
Prime Minister Boris Johnson, U.S. President Joe Biden and other world leaders are due to hold a call later on Tuesday to discuss further sanctions against Russia.
Russia, which earlier launched its long-anticipated all-out assault on east Ukraine, says it is conducting a special operation to demilitarize its neighbour.
Britain grants recognized status to some exchanges, which allow the securities traded on them to benefit from specific tax reliefs. While existing investments through MOEX would be unaffected, new ones would not benefit if its status is revoked.
Britain said the move was in response to restrictions the Bank of Russia has placed on foreign investors, citing a Feb. 28 ban by MOEX which prevented brokers from selling assets at the instruction of non-Russian residents.
The government said the exchange was “no longer operating in line with the normal commercial standards expected of a recognized exchange.”
Britain’s tax authority launched a two-week consultation on the move, inviting comment from interested parties before the terms are finalized.
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