Russias National Settlement Depository (NSD) has launched delivery versus payment (DVP) for settlements on securities and cash legs on a net basis for transactions concluded on the OTC market.
The service went live October 15. It is part of NSDs efforts to be appointed as Russias CSD. NSD says it is a final step in the integration of NSD, Depository Clearing Company (DCC) and the RTS Settlement Chamber. In the final stage of integration, DCC and RTS Settlement Chamber clients may transfer their settlements on OTC transactions denominated in foreign currency to NSD.
Russias two main exchanges were merged, along with NSD and DCC, as part of a major overhaul of the securities infrastructure in the country as part of a push to align Russia with global standards and become an international financial center itself. To read more about the efforts, see Reform, in overdrive, Global Custodian, Spring 2012.
Until the end of 2012, DVP will be provided to DCCs clients conducting DVP settlements in rubles and foreign currencies using accounts opened with RTS Settlement Chamber (except for settlements in foreign currency held by Russian resident non-credit organizations) and to new NSD customers conducting DVP settlements in rubles and foreign currencies using accounts opened with NSD (also excluding settlements in foreign currency held by Russian residents-non-credit organizations).
DVP allows the clients to settle securities and cash legs simultaneously. NSD DVP uses DVP-1 (both securities and cash legs are settled on a gross basis), DVP-2 (securities leg is settled on a gross basis while the cash leg is settled on a net basis) and DVP-3 (both the securities and cash legs are settled on a net basis) models.
Beginning January 1, DCC will stop providing settlements on a DVP basis; the final settlements denominated in foreign currency by DCC will be December 28, while for ruble settlements it will be December 29.
NSD will not collect clearing fees through the end of 2012 as part of a promotion.
Separately, the supervisory board of NSD met to approve a number of internal documents required to obtain CSD status. Those include Terms of Depository Operations; Internal Control Rules; Internal Control Rules Aimed at Combating Money-Laundering and the Financing Of Terrorism; New version of the companys Professional Ethics Code; EDI Rules; Regulations on Conducting Transactions and Document Interchange in the Process of Depository Operations; Rules of Managing Risks Associated with Central Depositorys Operations; Information Protection Rules; Information Disclosure Rules; Regulations on Processing of Customers Complaints and Requests; Catalogue of the Tariffs for Central Securities Depository Services connected to transactions with securities with regard to which the depository has opened the nominee holder account or in respect of which the central depository acts as an entity providing mandatory centralized custodial services; and a new version of the Regulations on Customer Committee.
The documents will be submitted to Russias Federal Financial Markets Service as part of the process to secure the CSD status.
The supervisory board also approved several internal documents required to obtain a license to engage in clearing activities: a new version of NSDs Uninterrupted Operations Policy; a list of measures aimed at minimizing risks associated with clearing operations and conducting clearing and other types of NSDs operations in securities market simultaneously; and Internal Control Rules of NSD as a professional intermediary in the securities market and a clearing organization.
The board also appointed Tatyana Gello, chief of Internal Control Division, NSD, as Internal Controller of CSD. Sergei Bosetsky, internal controller and chief of Securities Market Professional Intermediarys Internal Control Department, NSD, was appointed as internal controller of clearing organization.
Finally, NSD also signed a memorandum of intent with SIX Financial Information allowing the firms to exchange and distribute corporate action information. The agreement offers an expansion of information services to the local and international sectors of the Russian stock market while adding Russian corporate action information to SIX Financial Informations data offering.
(CG)