National Settlement Depository (NSD), Russias CSD, has approved a road map for the mass transfer of assets from the accounts of the custodians to the CSD for safekeeping.
The road map, which follows consultation with custodians in the local market, is focused on the completion of transfer of client assets to the CSDs accounts in the first quarter of 2013 to support forthcoming placements of securities of privatized Russian companies on the Moscow Exchange.
The company plans to complete securities transfers from the registers to the NSD in March 2013. In addition to asset safekeeping, foreign investors consider NSD as eligible securities depository in compliance with the SEC Rule 17f-7, said NSD.
On the basis of an outcome of discussions with custodians, the NSD plans to simplify transfers using a Speedy Settlement Scheme (SSS) through existing bridges between the CSD and custodians (ING Bank, Citibank, J.P. Morgan International, VTB Bank and Sberbank of Russia). To minimize operating risks during the period of mass transfers of assets from custodians accounts to the NSD, the company has allowed brides bridges in the weekends (on 2, 10 and 16 March).
During the period of mass transfer of assets via SSS, the reduced tariffs will be applicable. The three-fold decrease of tariffs is planned. The clients will be able to use SSS up to March 18; after this date SSS will be canceled in compliance with the law.
Moreover, after discussing the issue with custodians and registrars, NSD made decision on a single step requalification and opening nominee holder central depository (NHCD) accounts in the first quarter of 2013. On March 26, NSD will send the appropriate instructions to registrars for completion of these processes by March 29. Starting April 1, interactions with registrars regarding NHCD accounts will be conducted by means of counter instructions, using reconciliation procedures on each transaction and indicating names of securities owners.
According to preliminary estimates, NSD will open approximately 1,200 NHCD accounts in the first three months of 2013.
(JDC)