The London Stock Exchange Group's clearing arm LCH said on Thursday it had placed VTB Capital, the trading arm of Russia's VTB Bank, in default as a clearing member.
It is the latest sign of how a raft of sanctions introduced by Britain, the United States and European Union in response to Russia's invasion of Ukraine are hitting Russian banks.
"LCH Limited issued a default notice today, 3 March 2022, in respect of VTB Capital PLC, which is a non-FCM clearing member and was participating in the LCH EquityClear service," LCH said in a notice to all of its members.
VTB did not immediately respond to a request for comment.
A person familiar with the situation said the sums involved in the default were limited and would be covered in the first instance by using the margin or cash VTB Capital had posted against its share trading activity.
The default was not expected to mean tapping the LCH default fund, the person said.
Last Friday LSEG suspended VTB Capital's membership of the exchange, meaning it could no longer buy and sell stocks listed on the platform.
Regulators are preparing for a possible closure of the European arm of VTB Bank, Reuters reported on Thursday.
LSEG said on Thursday it has now suspended 28 of its Russian company listings in response to the sanctions and the need to maintain an orderly market. Some of the listings have lost nearly all of their value.
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