National Settlement Depository (NSD), Russia’s CSD, has launched a program to inform the global investment community about the new configuration of Russia’s post-trading system. This follows completion of the mass transfer of assets to NSD’s accounts in March.
The program provides information about the fundamental change in the system of securities record keeping and settlements, including investment funds, which have not been represented in the Russian market due to the high risks of Russia’s settlement infrastructure, which existed prior to formation of the CSD.
The program is being developed and will be implemented jointly with global custodians operating in Russia and other institutions which are the members of International Consulting Committee (ICC), a committee of senior managers of global investment institutions formed by NSD in 2011.
Commenting on the mass transfer of securities and the creation of the CSD, Eddie Astanin, chairman of the executive board, NSD, said: “These events reflect recognition of Russia’s post trading infrastructure as eligible by international financial institutions operating in our country. Russia has been making efforts to achieve this for twenty years, as this was a condition determining the country’s position in the global capital market in respect of risks and attractiveness of investment in local assets. One of our main tasks at this stage is to inform an expanded circle of global investors about the revaluation of risks by their colleagues operating in Russia.”
NSD has also signed foreign nominee account agreements with Kazakhstan’s joint stock company Central Securities Depository (KACD), the National Depository of Ukraine (NDU) and Belarus’s Republican Central Securities Depository (RCSD).
Under the agreements, NSD will provide services related to record keeping of rights of securities to the persons concluding foreign CSD account agreements, maintaining CSD foreign nominee accounts, conducting operations in the account and rendering other services connected to execution of rights for securities.
Customers of KACD, NDU and RCSD may conduct settlements on transactions and keep securities using KACD’s account with NSD.
NSD has already opened the accounts with the three CSDs.
Specifically under the RCSD agreement, the depositories plan to expand the bilateral cooperation and to establish close business relations related to exchange of information regarding procedures of functioning of clearing, record keeping and settlement systems of Russia and Belarus. The parties also intend to cooperate in the sphere of record keeping of Belarusian issuers’ securities in NSD correspondent account (foreign nominee account) opened with RCSD and Russian issuers’ securities in RCSD account opened with NSD, to conduct trainings and exchange experience, to consult on information storage and processing issues, and tackle other issues related to the depositories’ co-operation.
These agreements were announced at the same time as the signing of a co-operation agreement between NSD and the National Securities Market Association (NSMA), establishing key directions of development and operations of the NSMA Price Center to inform market participants about fair market prices, including prices for assets with low market liquidity.
According to the signed document, NSMA will consult the market participants on use of the NSMA’s methods of financial instruments’ evaluation, upgrade the methods and develop new ones for the NSMA Price Center, and contribute to the joint project, including: upgrading and getting approval of existing evaluation methods in compliance with the market demand and regulatory requirements; interacting with regulators in respect of the NSMA Price Center’s operations; monitoring demand for price related information and promoting the Center’s services; and coordinating NSMA Price Council’s day-to-day activities.
NSD, which currently develops the software for automating the calculations of fair market prices, is also responsible for calculating and supplying the prices to market participants (banks, financial organizations and investment funds) on daily basis, using the agreed format and regime.
Eddie Astanin, chairman of the Executive Board, NSD, said: “Russia’s market demand for information about assets’ fair prices is very high. This product fits very well in the model of NSD as a provider of corporate information to financial market participants. This product is very popular among consumers according to trial results. And this is one more example of the synergy between NSD and NSMA.”
In a separate development, NSD subsidiary Depository Clearing Company (DCC), has appointed Alexander Chumachenko to the post of the company’s CEO. He is to replace Maria Krasnova, the former CEO of DCC, who successfully completed the integration of NSD. Krasnova will continue working as NSD’s executive responsible for legal issues, corporate governance and risk management.
Chumachenko was appointed advisor to the chairman of the Executive Board, NSD this year. Prior to that, he was at Sberbank since 2008 where he worked as deputy director of Treasury, chief of Client Services in Financial Markets, chief of Department for Retail Broker Services and Sale Network Support. He was responsible for client operations in stock market, client bond placements in domestic market, asset management and broker services. Chumachenko has held senior positions in various departments of Russia’s Ministry of Finance, including the Securities and Stock Market Department.