I spoke to my broker about this topic early in the week. I spoke to the global trading desk. They explained that the best (imperfect) analogy were the Chinese companies that were de-listed from U.S. stock exchanges by Executive Order (first by Trump and then later renewed by Biden). That was several years ago and the broker is still waiting for further guidance.
Investors continue to hold and own those stocks, but they cannot trade them. So, the issue becomes how the divestment eventually occurs. The two most likely outcomes are liquidation on behalf of the client or simply removal from the books without recompense.︀
It is an imperfect analogy, because ADRs and GDRs pose an even bigger problem because︁ you do not actually own the underlying stock. For example, an ADR represents one or︂ more shares of foreign-company stock held by that bank in the home stock market of the foreign company. In this case, Russia. That obviously poses many problems, including Russia possibly︃ ordering its banks not to recognize any GDRs, as a form of payback against the︄ West.
It is also an imperfect analogy, because the Chinese companies were found guilty of︅ spying, which is the primary means by which China gains access to technology. In the︆ case of the Russian companies, they themselves are not guilty of breaking any laws. The︇ sanctions target Russia itself. So, if you can buy Russian stocks directly, and are willing︈ to hold onto them for several years, it could work out. Especially if you can︉ place them directly in your name, versus holding them in the street name.
As already︊ noted, GDRs and ADRs pose bigger problems. The UK stopped all trading of Russian GDRs︋ yesterday or today. Many brokers in the U.S. stopped trading Russian ADRs over the last︌ few days.
With great risk comes great gain.
