BNY Mellon and the Russian CSD have developed a structure by which depositary receipts (DRs) can be converted into a share or vice versa in Russia within one business day. The conversion normally takes between two and three business days.
The structure will allow DRs to trade on the secondary market, settle and be used as collateral in repurchase agreements (repos) by Russian market participants in their own time zone.
BNY Mellon will act as custodian for Russian CSD National Settlement Depository (NSD) and depositary bank for DRs trading in the Russian market. The NSD is the central securities depository of the Russian Federation and part of the Moscow Exchange Group.
“We believe it will provide an added value service for our customers,” says Eddie Astanin, chairman of the Executive Board of NSD. “As a consequence we expect to see increased interest from global investors working with depository receipts in the Russian securities market.”
“This is a revolutionary solution for the capital markets because it’s the first time a DR will trade on its local market”, observes Christopher Kearns, CEO of BNY Mellon’s Depositary Receipts business. “DR’s trading in multiple markets at the same time is also a relatively new concept. This is another step towards the idea of a global security which allows investors to transcend geographical borders.”
BNY Mellon and NSD Develop Structure to Allow Depository Receipts to Trade in Secondary Market
BNY Mellon and the Russian CSD have developed a structure by which depositary receipts (DRs) can be converted into a share or vice versa in Russia within one business day.