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1 National Settlement Depository: The New Element of Russian Financial Infrastructure Sergey Sukhinin Deputy Chairman of the Board National Settlement.

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Presentation on theme: "1 National Settlement Depository: The New Element of Russian Financial Infrastructure Sergey Sukhinin Deputy Chairman of the Board National Settlement."— Presentation transcript:

1 1 National Settlement Depository: The New Element of Russian Financial Infrastructure Sergey Sukhinin Deputy Chairman of the Board National Settlement Depository 9 th Ruble Forum April 2011, London

2 2 NDC Member of the MICEX Group The biggest Russian settlement depository servicing all types of securities Provider of DVP settlement services for both primary and secondary markets and FOP /DVP settlement for OTC trades Settlement depository of three Russian stock exchanges Depository with AA- rating issued by Thomas Murray MICEX SH Member of the MICEX Group The biggest Russian non-banking credit organization Provider of settlements in all MICEX markets: for government and corporate securities, foreign exchange, derivatives and commodities Provider of settlements in OTC markets: DVP transactions of NDC depositors, REPO deals with the Bank of Russia, deposit and loan transactions of the Bank of Russia Authorized Settlement Center in Organized Securities Market nominated by the Bank of Russia Integration of two different businesses

3 3 Building of Unique Structure The National Depository Center (NDC): The biggest depository of Russia National Settlement Depository (NSD) MICEX Settlement House (MICEX SH): The biggest non-banking credit institution of Russia NSD :The biggest securities depository functioning as non-banking credit organization officially registered on 03 November, 2010

4 4 Creation of National Settlement Depository: Aims and Advantages Aims: To build a unique structure for the Russian market providing the whole range of services of a settlement depository and a non-banking credit organization To improve the quality of services, provided for operational reliability Advantages of the new structure: Increased capitalization to strengthened position in the market Reduced costs and risks for clients Full range of settlement services for securities and cash Accelerated and optimized settlement process Opportunity to introduce new services, including securities lending and collateral management More flexible and attractive tariff policy

5 5 NDCs customer base as of 01 January, 2011

6 6 NSDs basic financials as of 01 January, 2011 (in millions) Total assets – RUB (USD 2 592) Monthly average total assets for 2010 – RUB (USD 3 753) Equity – RUB (USD 259) Net profit for the year – RUB (USD 34) Funds with the Bank of Russia and in correspondent accounts with prime foreign banks – RUB (USD 1 947) Daily average turnover through customers accounts – RUB (USD ) Daily average turnover through correspondent account with the Bank of Russia – RUB (USD ) Total value of securities held in securities accounts - RUB (USD ) Quantity of securities held in custody (in securities accounts) – items

7 International & Domestic Cooperation 7 National Association of Securities Market Participants National Securities Market Association The Association of Eurasian Central Securities Depositories European Central Securities Depositories Association, Russian National S.W.I.F.T. Members Association (ROSSWIFT) Association of National Numbering Agencies Society for Worldwide Interbank Financial Telecommunication

8 8 Features and benefits of cash settlements effected by NSD Liquidity ratio at 100%, no credit risks Advanced, fully automated technology used in payment processing Certified encryption mechanism protection Availability of alternative communication channels and all data backup Direct participation in Bank of Russias RTGS system (BESP) Extended operational deadlines for RUB and foreign currency payments : RUB – 20:30 USD – 20:30 EUR – 16:00 CHF – 14:00 GBP – 11:30 BYR – 13:00 UAH – 17:30 KZT – 13:00

9 9 International cash settlements through correspondent account with major foreign banks JPMorgan Chase Bank, New York, USA The Bank of New York Mellon, New York, USA HSBC Bank USA, N.A., New York, USA J.P. Morgan AG, Frankfurt am Main, Germany VTB Bank (Deutschland) AG, Frankfurt am Main, Germany JPMorgan Chase Bank, N.A., London, United Kingdom Euroclear Bank SA/NV, Brussels, Belgium Clearstream Banking S.A., Luxembourg, Luxembourg In PJSC CB Privatbank, Dnepropetrovsk, Ukraine National Bank of Kazakhstan, Almaty, Kazakhstan JSC Bank VTB (Belarus), Minsk, Belarus

10 10 Market trends and new challenges External drivers Legislation on CSD to appear in the Russian Federation Russian legislation for on- exchange trading with foreign financial instruments has been approved ICSDs (Euroclear, Clearstream) and exchange groups (NYSE, Nasdaq, LSE) fight for a larger- scale business, new markets and acquire new infrastructural organizations in other countries New systems of cross-border trading have been launched: T2S, Link UP Markets New challenges MICEX expands its business to the CIS markets (Ukraine, …) Support to the newly creating IFC project in a global competition for international investors Thus we are to have the whole range of up-to-date services meeting domestic and global investors expectations

11 11 NSDs market position for 2014 Moscow International Financial Center International investment structures Russia trading floors SPICEX RTS Russian OTC RSX NCC MICEX Group MICEX Stock Exchange National Mercantile Exchange National Settlement Depository MICEX New CSDs and ICSDs Euroclear…Clearstream CIS burses PFTS … New London Frankfurt Tokio Hong Kong Moscow 3 hours 2 hours 6 hours 5 hours CIS CSDs New

12 12 NSD as a single entrance point for foreign investors: vision for 2014 Custody, Settlements, Securities Lending, Access to RTGS Intermediaries IPO/SPO, corporate actions, corporate information Issuers Lombard Loans, REPO, Collateral Management Bank of Russia CSD for the government debt market Ministry of Finance Custody, Cross-border settlements Foreign intermediaries (CSDs, ICSDs) Custody, Interbank, Forex, Precious metals Commercial banks Settlements on the basis of clearing MICEX SPICEX Transaction Settlements, Pre-matching settlements OTC Russia OTC Russia RTS PFTS Abroad New clients

13 13 New IT-systems: Alameda and ASER Development of DVP 1 DVP 3 on the OTC market Securities lending agent Settlements through BESP Mature EDI system with registrars Collateral management FundSettle system Preliminary matching PVP Single corporate information center Settlements of trades with precious metals Business continuity system. Backup center, backup office Eligible depository according to 17f-7 (SEC 1940 Act) Correspondent network in all the CIS countries IPO for CIS issuers Derivatives: accounting and settlements Mortgage transactions: safekeeping, accounting and settlements Provision of services on 24х7 basis Loans secured by portfolio of financial instruments Total assets on deposit : - RUB 30 tn Foreign securities – RUB 6 tn Safekeeping of all Russian securities owned by foreign investors: NSD share not less than 30–40% Safekeeping of the major part of foreign securities owned by Russian investors (60–70%) Integration into basic European and global settlement systems Correspondent relations with the leading CSDs and ICSDs Leading settlement depository in the CIS NSD – integration completion CSD of the Russian Federation Range of services complies to the best CSD practice Detailed roadmap of NSD strategy realization

14 Web-sites: Address: 13, bldg. 1, Mashkova St., Moscow, , Russia Contacts Client Services Division : Tel.: +7 (495) (91) Client Relations Development Department : Tel.: +7 (495) Public Affairs Department : Tel.: +7 (495)


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