Depository Clearing Company (DCC) hereby informs its clients that effective November 1, 2012 its correspondent depo account with the National Settlement Depository (NSD) will become the main place of safekeeping.
This decision is part of the integration process of DCC and NSD, and is in line with the NSD’s plans to become the Central Securities Depository.*
* - The change of place of safekeeping is an allowable transaction in accordance with a.11.7 of the Regulation No.36 of 16.10.1997 On Depository Activities in the Russian Federation, and also is compliant with the Terms and Conditions of the Depository Activity of DCC that envision an open method of securities recordkeeping.
The concentration of assets on the DCC’s main securities account with NSD will be achieved by transferring securities from the DCC nominal holder accounts in shareholder registers to the NSD nominal holder accounts. Once these transfers are finalized, DCC will close its accounts in shareholder registers.
Please note that the change of place of safekeeping will affect all securities accepted for service by NSD and DCC, except for Gazprom shares and securities of issuers which maintain the shareholder registers themselves.
Therefore, two lists of issuers will be published on the DCC and NSD integration websites:
- List of issuers whose securities’ main place of safekeeping will be NSD (‘the List of securities transferred to NSD’);
- List of issuers whose securities’ place of safekeeping will not be changed by DCC (‘issuers which maintain their shareholder registers themselves’).
Effective November 1, 2012, an Instruction to Deliver securities included in the list of securities being transferred to NSD to the share register will be executed by DCC by generating a similar instruction to NSD. NSD will then generate a transfer order to the share register.
Deposit of securities into the depo account of DCC from a counterparty account in share register will be also performed by the transfer of assets to the NSD nominal holder account in share register. Please note that the transfer order should still contain the Depository/Inter-Depository Agreement between DCC and the Account Holder as the basis of transfer, and additionally it is necessary to indicate the Inter-Depository Agreement between DCC and NSD No.2-D-799/DMS-0 of 30.04.1999.
The procedure for execution of settlement instructions with Gazprom shares will remain unchanged.
Participants’ expenses for safekeeping as well as for withdrawal of securities to the register / deposit from the register will remain unchanged and will be charged in accordance with the current DCC fee schedule. NSD fees will not be charged to DCC clients.
Upon execution of instructions, participants will be provided with standard DCC reports.
Effective November 1, 2012, DCC stops deposits of securities into its accounts in share registers and closes the accounts. In case securities are deposited into DCC’s account in the share register after November 1, 2012 before DCC’s account has been closed, the participant will be charged a fee in the amount of RUB4,910 (VAT excluded). This rate was approved by the DCC Committee of Major Participants and will come into effect from October 2012.
Effective November 1, 2012, execution of instructions via the DCC-NSD settlement bridge becomes impossible (except for Gazprom shares), and DCC will no longer serve as an allowable place of settlement for NSD. Settlement between clients of NSD and DCC will be facilitated by way of internal depository transfers within NSD, with the following benefits for the participants:
- Securities will no longer be divided into “bridge-eligible” and “not bridge-eligible” – all securities will settle between NSD and DCC through the same settlement mode;
- Online settlement of Instructions;
- Reduced costs of transactions between DCC and NSD;
- Instructions can settle throughout the whole operating day of NSD.
You are advised to prepare in advance for the asset transfers planned by DCC, and estimate the time and labor associated with the transition to the abovementioned scheme of interdepository transfers. For more details, please see the websites of DCC and NSD.
Please also note that speedy settlement schemes between NSD and custodian banks (SSS), as well as between DCC and custodian banks (ESSS), will continue to operate as usual.
More information on the migration of assets from DCC to NSD is available on the integration website in the section “Road to CSD Status”.
If you any questions in relation to this communication, please contact your relationship manager at DCC.