Bison Bank and possible Sanctions?

Hello. We have applied for the investment route on the Portuguese Golden Visa, and we have made our investments through Bison Bank. Bison Bank is one of the banks approved to hold these investments and also comply with US FATCA provisions. Bison Bank is based in Portugal but is funded entirely, we are told, through Hong Kong investors.

However, as the Ukrainian situation continues, we are becoming a bit concerned that at some point sanctions may extend to some parts of the Chinese economy, including possibly banking.

Does anyone have thoughts or opinions on how or if such a thing would affect the liquidity and viability of Bison Bank? Has anyone transferred their Golden Visa investment holdings out of one bank to another? Is this possible, and if so, do you know how much it might cost to do so?

Thanks for any advice you can give!

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Anything is possible but this is utter speculation at this point.

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Bison is just a custodian. Your money is all in Portugal. So not very bad I suppose.

I invested through Bison Bank as well, but the money is now invested in Portugal, so my consultant says there is no problem.

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Thank you. Yes, I understand the funds are not invested in the bank, but rather in the Portuguese funds. However, I have also read that banks which hold these investments can loan those investments to themselves, essentially as collateral. I have read that this could put those funds at risk if the bank runs into a liquidity problem.

Does anyone have any further information about that? Is it true? If so, are there ways to protect against it?


I’m confused on how that would happen. If you invest in a fund, the money goes into the fund and the fund decides how to invest it. If there’s an issue, it’s with the fund, not the bank - unless the fund keeps its money in the bank instead of investing it.

If you deposit money in a bank (not to invest), you are essentially loaning the money to the bank where they can do what they want with it, like loan it out to others. That is protected by the deposit guarantee fund (similar to the USA’s FDIC) for up to 100,000 euros.

Douglas, can you please share a link to what you’ve read?

Hello RJ. Yes, in fact I read it here on NG. The link is at:

I’m not saying the information in this link is accurate. In fact, I’d like to know more about whether it is accurate or not. In particular, has anyone dealt with the issues mentioned in the lined convo?



This is true. I followed up with Bison bank. I had to do was send a letter to Bison bank directing them not to loan our securities. You can see that in the stipulations “Unless there is a written communication addressed to the Bank, the Client expressly authorizes the Bank to use securities or other financial instruments deposited in its Securities Account in securities loan operations, in particular in order to cater to settlements of stock exchange operations in which the Bank is a counterparty,…” - this is from their “general conditions 2021 pdf”

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Thank you Ravi. Is there a specific person or department you directed your letter to? If not, I can send to our rep there.

I don’t think sending the letter is a terrible thing, but IME this isn’t actually all that important.

The key here is “stock lending operations”. This is a relatively specific yet common operation that has primarily to do with listed securities.

When someone shorts a stock on an exchange - say you short 100 IBM - what you are doing is selling 100 shares of IBM to some other person. That person is entitled to actually receive those stocks. So for you to be able to short the stock at all, you have to somehow get them from someone else. This is “stock lending” and is a fundamental operation of developed markets. I can guarantee that pretty much all of your shares of stock held at your accounts in Ameritrade/Schwab/Fidelity have been lent out in support of shorting operations. Indeed, if there were no shares to borrow, there would be no one shorting stocks - it wouldn’t be possible - and the entire market would seize up in some pretty bizarre ways that I shan’t get into. (I will grant that shorting can be bad. But it is also fundamentally necessary for a number of reasons. Say, if you want there to be stock options.)

If you dig through your Schwab / Fidelity paperwork, you will find that you made the very same statement to them, buried in section 34.0.53. And if you wish, you can write to them and request that your shares not be lent, in the exact same way.

There is a whole set of operations market-wide around the idea of keeping track of shares lent and what shares are available to lend and as a result how much shorting anyone can do anywhere. There are “hard to borrow” lists even, where the cost to borrow a stock goes way higher because there’s a limited number of shares available to be lent. This has direct effects on the market as a whole.


In practice, since there is no liquid market for these fund shares, there’s no reason for anyone to want to borrow them in the first place. Oh I guess it’s a theoretical risk but IMO not in practice. So sending that letter is not high on my list of priorities. YMMV.

Thanks Jeff B for your very comprehensive answer. Would you change your answer at all if the issue of the solvency of Bison Bank were in question? I ask because they have apparently had some close calls in the past, and further, we are not too confident about Chinese based banks being exempted from sanctions in the future.

No, I would not change my answer, when it comes to specific item in question. Stock lending operations are quite specific in how they operate and for what purpose. If the bank lends them to itself, then it’s a no-op, and since they’re not listed securities they can’t get traded to another entity since that requires a central clearinghouse, so there’s no counterparty risk involved to create some sort of creditor/debtor situation.

At the end of the day I think the risk is that your fund shares are tied up more than a total risk of loss. The shares don’t belong to the bank, and your money is not at the bank it’s with the fund. Any situation is most likely to be resolved in due course, just that your ability to liquidate the shares will be in question during any liquidation or bankruptcy/insolvency proceedings (which admittedly could take years). I would be far more concerned if (a) the fund were holding its assets at the bank or (b) I were using their wealth management services (e.g. having my cash on deposit at the bank buying funds issued by the bank) - in other words, somehow involved in their operations. No, I wouldn’t LIKE it if there were solvency concerns or sanctions but I’m not in a panic about it.

I don’t know the particulars of Portuguese banking law to know how insolvency or sanctions would affect anything, but it’s sort of too late for that anyway, and if it happens this one letter is not going to materially change any outcomes IMO.

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Thanks very much for taking the time to provide these very complete answers.