Only in Vienna - A Direct Link to the Russian Securities Market

18 June 2014
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There are numerous attractions you can only find in Vienna. The burial place of Gustav Klimt, the world's largest collection of imperial furniture, vineyards in the center of a major city, and Europe's greatest landscape garden, to name but a few. Add to this list a factor which now sets the city apart in the capital markets as well:  a direct link to Moscow which offers you the opportunity to process original Russian stocks.

In 2013, the Austrian Central Securities Depository operated by OeKB, and National Settlement Depository (NSD), Russia’s central securities depository, launched the first international direct link for the full range of Russian securities. As a result, Austrian and international custodians holding securities accounts with CSD. Austria can conduct direct settlement of Russian securities and safekeep them using CSD. Austria’s foreign nominee account opened with NSD.

In recent months, a number of international custodians have sought to take advantage of this unique link to reduce costs when dealing with Russian securities. As the message has spread, the number of custodians looking to eliminate intermediate steps has increased, also driven by the appeal of SWIFT communication and comprehensive tax services.

Opening this direct link with NSD became possible after Russian legislation allowed foreign CSDs to open Foreign Nominee Accounts with NSD. The Austrian CSD provides its clients with direct access to Russian on-exchange and OTC markets for all types of Russian securities, as well as to information services and ruble settlements.

“We saw constantly growing demand for holding original Russian securities – especially stocks” Georg Zinner, head of the OeKB Capital Market Services business unit, said.“OeKB’s unique equity link shortens the line of depositories involved and considerably increases custody quality.”

Considering the vast interest of foreign investors in the Russian market in general and the large number of IPOs in the pipeline as part of the Russian government's privatization program, this custody link is expected to see steadily growing traffic.

“CSD.Austria's decision to open an account with NSD reflects the progress made in integrating Russia’s financial market into the global post trading infrastructure," Angelika Sommer-Hemetsberger, a member of the Board of OeKB, said.

The process for holding shares of Rosneft, Sberbank or Gazprom has lower cost and less risk as a result of the new link.

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