National Settlement Depository (NSD), Russia’s central securities depository and a part of the Moscow Exchange Group, has initiated corporate actions reform in Russia with the support of Russia’s regulator, issuers, registrars and clients that will implement new technologies and international standards for electronic document exchange.
NSD has already introduced e-proxy-voting and shareholder meeting notifications using the messages in NSD-developed formats and now the technology is being modernized in accordance with international interaction standards, such as with the introduction of international formats for annual general meeting (AGM) notification.
The reforms will aim to reduce overall risk by moving from manual, paper documents to electronic communication, including the introduction of electronic proxy voting.
By the end of this year, companies will be able to use ISO 20022 and ISO 15022 messaging to inform clients about shareholder meetings. Then by May 2015, NSD expects to complete the automated e-proxy-voting changes. The conditions for e-proxy-voting were set in August 2014, following Russian regulations that allowed depositories to form electronic voting documents for their clients without the power of attorney.
“Now we have the efficient components of proxy voting,” said Eddie Astanin, chairman of the Executive Board, NSD at a Sibos panel.
He added: “We expect new amendments in our legislation will be implemented. By that I mean changes concerning all types of corporate actions…according to these amendments, Russian issuers will be obliged to disclose corporate information from April on [using] the ISO 20022 standard.”
End investors—including foreign investors, which have become more prominent with recent links to Euroclear, Clearstream and Austria’s Oesterreichische Kontrollbank (OeKB)—will be able to execute rights on Russian securities in a more centralized, electronic fashion, and Astanin notes that this modernization will help further encourage investors.
“We believe that by the end of next year, we will finish implementation of the technology in our IT platform, and after that I hope we will turn to be the most developed CSD all over the world,” said Astanin.
At the same time as NSD works on these reforms, the CSD has also been recognized by the Bank of Russia as a systemically important central securities depository, a systemically important settlement depository and a systemically important repository.
“The assigned status of systemically important infrastructure means the highest level of NSD’s responsibility to both the regulator and the market,” said Astanin. “I can say with certainty that NSD will comply with this status in respect to reliable functioning, risk management, financial stability and a competitive product and service range.”
Russia's CSD Works on Modernizing Corporate Actions to Increase Foreign Investment
National Settlement Depository (NSD), Russia’s central securities depository and a part of the Moscow Exchange Group, has initiated corporate actions reform in Russia with the support of Russia’s regulator, issuers, registrars and clients that will implement new technologies and international standards for electronic document exchange.