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New Market Realities: Opportunities and Challenges Nikolay Egorov Director General, NDC Member of AECSD ACSDA Leadership Forum October 6 – 9, 2009 Santiago,

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Presentation on theme: "New Market Realities: Opportunities and Challenges Nikolay Egorov Director General, NDC Member of AECSD ACSDA Leadership Forum October 6 – 9, 2009 Santiago,"— Presentation transcript:

1 New Market Realities: Opportunities and Challenges Nikolay Egorov Director General, NDC Member of AECSD ACSDA Leadership Forum October 6 – 9, 2009 Santiago, Chile

2 Agenda AECSD evolution NDC strategic development

3 Association Members Central Depository of Armenia The National Depository Center (Azerbaijan) Republican Central Securities Depository (Republic of Belarus) Georgian Central Securities Depository National Securities Depository of Moldova Central Securities Depository (Kazakhstan) Central Depository (Kyrgyzstan) State CSD of the Republic of Uzbekistan Interregional Stock Union (Ukraine) The National Depository of Ukraine Depository Clearing Company (Russian Federation) The National Depository Center (Russian Federation) AECSD was established in 2001. The Association incorporates 12 depositories from 10 CIS countries:

4 Objectives Harmonization of the regulatory framework Establishment of depository links among the members to support cross-border securities transactions Standardization of the technologies for the depository operation, procedures for depository transaction processing, and rules and regulations governing the depositories' activities Adoption of international messaging standards for depository transactions and their use in the national practice Development of Electronic Document Interchange Supporting a coordinated process to enable the Association members to integrate into the global depository system

5 Governance Structure General Meeting of AECSD Members Chairman Secretariat NDC, Russia Working Groups Depository Links CSD Legal Issues Development of Electronic Messaging Standards Administration of the Association Website

6 Working Groups Activities Report Correspondent accounts of non-residents in depositories of the Association of Eurasian Central Securities Depositories (October 2008) Report Clearing Activities in AECSD Member Countries (October 2008 ) Corporate actions survey (October 2009)

7 International Activities of the Association An observer status in ECSDA, AMEDA and ACG Participation in international conferences and forums (CSD10, Annual Russian Securities Forum, SIBOS etc.) Organizing and holding seminars and trainings on depository and clearing services for Association members Proposal on cross-membership of AECSD and ACSDA as observers

8 VI International AECSD Conference Tashkent, Republic of Uzbekistan 15-16 October, 2009 Main Agenda of the Conference: The role of depository in the issuer's corporate actions in AECSD Record-keeping of rights for securities: from depository to custodian Regional markets during the crisis period: does the crisis generate ideas or obstacles

9 Agenda AECSD evolution NDC strategic development

10 The National Depository Center (Closed Joint Stock Company) Member of the MICEX Group The biggest Russian settlement depository servicing all types of securities NDC provides DVP settlement services for both primary and secondary markets and FOP /DVP settlement for OTC trades Settlement depository of three Russian stock exchanges AA- Thomas Murray rating NDC performance highlights for IH 2009 Value of securities held in NDC: RUB 4.7 trillion (+7.2%) Number of issues held: 2758 Number of inventory operations: 1 164 366 (-8.1%) Turnover: RUB 26.7 trillion (-7%) Capital and retained earnings (RAS) for IQ2009 vs IQ2008 : RUB 1,85 bln. (+25%). Net Income (RAS) for IQ2009 vs IQ2008: RUB102 mln. (-21,1%)

11 Strategic Direction: Effective Corporate Governance Structure On August 10, 2009 NDC became a Closed Joint Stock Company MICEX SH and NDC – on the way to merge Benefits for clients Providing a full range of settlement services Raising capitalization to strong the market position Improving perception of the Russian financial infrastructure globally The National Depository Center (NDC) MICEX Settlement House (MICEX SH) MERGE

12 NDC as Efficient Location for Domestic Settlement (1) Government bonds NDC – de-facto CSD Trading only on MICEX Main Trading Mode – T+0, Negotiated Deal Mode– T+0-T+2 Payment agent – Bank of Russia All trades are settled on DVP basis Equities No CSD Book-entry form Exchange trades (on MICEX, RTS) – same as bonds OTC: re-registration vs. settlement depository/custodian Trade settled through registrar – T+3 – T+7 cycle Trade settled via settlement depository/custodian – T+0 Corporate & Regional Bonds NDC – de-facto CSD Issued in dematerialised form with global certificates Main Trading Mode T+0, DVP, Negotiated Deal Mode T+0-T+30 DVP basis NDC as a paying agent in 29% of all transactions

13 NDC as Efficient Location for Domestic Settlement (2) NDC and ING Wholesale Banking project SSS - a temporary scheme, like NDC-DCC Bridge, will be replaced by more sophisticated CSD settlement services STP Fixed fee Blue chips Non-exclusive scheme SSS was created to allow faster settlements and faster links with various markets Speedy Settlement Scheme (SSS)

14 International Settlement Facilities Correspondent accounts CSD the Republic of Kazakhstan NDC of the Republic of Azerbaijan CSD of the Republic of Belarus Clearstream Banking Euroclear New DVP service via Euroclear Bank link Сash clearance account 16420 Securitie s clearance account 12065

15 Corporate Actions in Russia: NDCs Value Proposition 75% of documents handled by NDC are related to CAs NDC is the biggest Russian payment agent for the issuers of corporate and regional bonds NDC acts as the Russian National Numbering Agency and is authorized by FFMS of Russia to qualify the foreign securities for trading on the Russian market NDC statistics, 2007 - 1Q 2009 * Excluding bonds of the Bank of Russia 0 50 100 150 200 250 300 350 2007 1Q2007 2Q2007 3Q2007 4Q2008 1Q2008 2Q2008 3Q2008 4Q2009 1Q Merger / pari passu (cancellation of additional issues) Corporate actions (conversions, entitlements, exchange offers, redemptions, repurchases etc.)

16 Alliance Lite: Service Aimed at Boosting International Standards in Russia

17 The First Step to CCP and Securities Lending CCP for MICEX SE market - new project aimed to implement risk management system for fair market participants Securities lending as NDC service for CCP Accepted orders Lender MICEX Stock Exchange Trading floor MICEX as a Clearing system Borrower - Central Counterparty NDC Settlement depository Securities available for ASL trades Net – positions Net - positions Instructions

18 Contact Information AECSD Secretary The National Depository Center 13, bldg 1, Mashkova St., Moscow,105062, Russia Tel.: +7 (495) 232-0513 E-mail: AECSD Website: Thank you for attention!

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