Euroclear Bank and NSD to advance Russian Financial Centre

Brussels and Moscow, 29 March 2012 – Euroclear Bank and National Settlement Depository (NSD) announce today their plans to provide highly efficient cross-border services for all classes of Russian domestic securities. Pending receipt of regulatory approvals, settlement, custody and related services will be provided for stock exchange and OTC equity trades, government (OFZ) and corporate bond transactions – the most extensive range of services and Russian asset classes offered by a market infrastructure outside Russia.

The direct link between NSD and Euroclear Bank aims at providing the highest level of asset protection for clients using the service, which is scheduled for launch in the coming months. As a result, more than 1,300 of the world’s most active international trading firms with accounts at Euroclear Bank will be able to settle cross-border trades between themselves through Euroclear Bank and with counterparties in Russia through the link with NSD. Russian domestic securities will also become eligible as collateral in Euroclear Bank’s tri-party services.  

Eddie Astanin, Chief Executive Officer ofNational Settlement Depository, commented: “Participants of NSD have been settling transactions and safekeeping international securities via NSD’s account with Euroclear Bank since 2007.The new law in Russia will recognise NSD as Russia’s central securities depository and allow NSD to open a ‘foreign nominee account’ for Euroclear Bank to develop the direct link. Partnering with Euroclear Bank clearly adds value to our clients and to the Russian economy by easing cross-border flows between the Russian and international investment communities. It helps advance the goal of creating a Russian Financial Centre.”

Frederic Hannequart, Chairman of Euroclear Bank, said: “It is very important to create the type of service for Russian securities that will appeal to our financially sophisticated client base. The portfolio of services we will launch for Russian securities will earn the trust and confidence of securities professionals who follow the same principles as Euroclear when it comes to efficiency, effectiveness and operational risk control. Working directly with NSD is the optimal way forward in this regard. Having an easy and convenient post-trade arrangement in place for cross-border trades will facilitate foreign investor flows to MICEX-RTS, as well as boost domestic liquidity for all Russian securities.”

Working with Euroclear Bank to provide local asset servicing expertise and intelligence on Russian securities, Nadezhda Ushakova, Head of Custody at VTB Bank, said: “We are very pleased to have been selected by Euroclear Bank as its custody agent in Russia. The launch of Euroclear Bank services for the full range of Russian securities is a major step towards further developing Russian financial services and increasing Russia’s attractiveness to international capital flows. As a leading Russian bank with many international clients and unique expertise in providing high level banking services worldwide, VTB Bank will contribute in a beneficial way for Euroclear Bank clients.”

Upon launch of the link with NSD, Euroclear Bank will have links with CSDs in 45 major countries. The Russian ruble is already one of 52 settlement currencies in Euroclear Bank.

NSD has links with CSDs/ICSDs in seven countries.

Russian cash equity market capitalisation increased by 29% in 2011, reaching the equivalent of USD 954 billion. Total Russian debt outstanding is valued at USD 200 billion of which 60% is corporate and municipal bonds, with the remainder in government bonds. Foreign holdings are valued at approximately USD 200 billion in equities and USD 20 billion in bonds.

Euroclear and NSD (formerly known as The National Depository Center - NDC) signed a Memorandum of Understanding in 2007, laying the foundation for information sharing and potential future co-operative initiatives. Both organisations specifically agreed to explore collaborative opportunities in the fields of clearing and settlement in Russia.

Note to editors

National Settlement Depository (NSD) is the largest settlement depository in Russia. It is part of the MICEX Group (which recently announced its merger with RTS, the second major stock exchange in Russia) and services on-exchange and OTC transactions, including all types of debt and equities of Russian issuers and provides settlement services to participants in the Russian Federation financial markets. NSD provides storage of global certificates and depository accounting for 99% of corporate bond issues, sub-federal and municipal bond issues. It services 100% of transactions conducted in the federal bond and the Bank of Russia bond markets, more than 99% of transactions conducted in the corporate and regional bond markets, the majority of transactions involving equities and services UIT units and securities of foreign issuers. In accordance with agreements concluded between NSD and the Bank of Russia, NSD acts as a settlement centre for the organised securities market. NSD is Russia's national numbering agency and the substitute numbering agency for the CIS, authorised to assign the international ISIN and CFI codes.

For more information, please visit http://www.nsd.ru/.

The Group conducts its banking business in Russia through VTB Bank as a parent and 5 subsidiary banks. The Group’s largest subsidiary banks in Russia are VTB24, Bank of Moscow and TransCreditBank.

Today, outside Russia, the Group operates through 15 bank subsidiaries, located in the Commonwealth of Independent States (Armenia, Ukraine (2 banks), Belarus (2 banks), Kazakhstan and Azerbaijan), Europe (Austria, Cyprus, Germany, France, Great Britain and Serbia), Georgia, Africa (Angola); through 2 representative offices located in Italy and China; through 2 VTB branches in China and India and 3 branches of “VTB Capital” in Singapore, Dubai and Hong Kong. 

VTB is the second largest financial group in Russia by assets (RUB 6,337 billion) and by customer deposits (RUB 3,551 billion) since 30 September 2011.

The government of the Russian Federation is VTB Group’s main shareholder and owns, through the Federal Property Management Agency, 75.5% of its registered share capital.

For more information, please visit www.vtb.com.

Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds. Serving major financial institutions located in more than 90 countries, Euroclear Bank, based in Brussels, is part of the Euroclear group. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor's.

The Euroclear group also includes Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. Euroclear also owns Xtrakter, operator of the TRAX trade matching and reporting system. The Euroclear group settled the equivalent of more than EUR 580 trillion in securities transactions in 2011, representing
163 million domestic and cross-border transactions, and held more than
EUR 22 trillion in assets for clients.

For more information, please consult http://www.euroclear.com/.

Contacts

Euroclear

Denis Peters

+32 (0)2 326 2618

Martin Gregson

+32 (0)2 326 4186

Stеphanie M.L. Heng

+32 (0)2 326 1151

National Settlement Depository

Olga Rink

+7(495)2344827 ext.4562

mobile +7(903)6164832