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SPB Exchange is the second-largest Russian trading venue, known above all for organising trading in foreign securities. After sanctions were imposed in 2023, this business was effectively halted, and the company is rebuilding its model. The shares trade under the ticker SPBE.
An exchange earns a fee on every trade and charges for related services — clearing, custody, access to data. The model is the same as at any trading venue: costs are almost fixed, so additional turnover comes in at a high margin, while a fall in turnover hits profit disproportionately hard.
What made SPB Exchange unique was its specialisation: it gave Russian retail investors access to the shares of foreign companies. The sanctions imposed on the venue in November 2023 led to the freezing of assets and the halt of this trading — that is, to the loss of the core business, not to its contraction.
The current stage is a search for a new footing: trading in instruments from friendly jurisdictions, commodities and digital assets. This is building a business from scratch, not restoring the old one.
A fee on the trades of trading participants.
Servicing the settlement of executed trades.
Instruments from friendly jurisdictions, the commodity market, digital assets.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company organises exchange trading: it provides a venue on which participants execute trades, and it services the settlement of those trades. Historically, its specialisation was trading in foreign securities.
In November 2023, sanctions were imposed on the venue, because of which trading in foreign securities was halted and part of the client assets ended up frozen. Since then the company has been working on unfreezing them and on developing other business lines.
Because its costs are almost fixed: technology, staff and infrastructure cost the same at any trading volume. The fee, however, is charged on every trade, so when turnover falls, revenue declines while the costs remain.