A unit of JPMorgan Chase & Co. has suspended trading in two of its equity funds, saying the Russian invasion of Ukraine was an emergency that made it hard to value or sell investments held by those two vehicles.
Global financial institutions are rushing to react to the conflict, and to the tough sanctions that the U.S. and its allies have imposed on Russia in retaliation.
A spokeswoman for J.P. Morgan Asset Management said it had suspended two investment vehicles, known as the Russia Equity Fund (SICAV) and Emerging Europe Equity Fund (SICAV), with immediate effect.
“We are closely monitoring the risks and remain focused on acting in the best interests of our clients and shareholders, at all times, as part of our fiduciary duty,” she said in an email Tuesday, adding that J.P. Morgan Asset Management would keep the suspension under review.
“Due to the escalating conflict between Russia and the Ukraine, normal market trading conditions have been significantly impaired, which in the view of the management company constitutes an emergency as a result of which disposal and valuation of investments of the fund is impracticable,” the firm said in a notice to investors dated Monday.
Some of the financial infrastructure that enables the trading of Russian securities is also being dismantled, with the clearinghouse Euroclear preparing to stop investors from clearing trades involving ruble-denominated securities.
Euroclear’s competitor, Deutsche Börse’s Clearstream unit, is taking similar steps. In a statement Monday, Clearstream Banking said it would stop settling domestic trades in Russia, accepting rubles as a settlement currency, and settling trades for various Russian-linked stocks and bonds.
In another move that potentially influences wider investor behavior, MSCI Inc. has signaled it could cut Russia from many of its widely followed equity indexes.
