Brussels and Moscow, 4 October 2012 – Euroclear Bank is pleased to have been granted access to Russia’s central securities depository (CSD) by Russia’s Federal Financial Markets Service to offer post-trade services for RussianOFZs, one of the most actively traded classes of Russian government bonds. Euroclear Bank will also be able to offer services for other Russian government and municipal bonds, corporate bonds and securities issued by foreign entities. This welcome development ends months of speculation as to whether OFZs would become ‘Euroclearable’.
The availability of Euroclear Bank’s services for OFZs and other securities is dependant upon Russian public authority approval of National Settlement Depository (NSD) as Russia’s official central securities depository, and related regulatory procedures. Plans for Euroclear Bank’s OFZ and other Russian fixed-income securities services include cross-border transaction processing, asset servicing and collateral management.
Frederic Hannequart, Chairman of Euroclear Bank, said: “The bilateral NSD/Euroclear Bank link aims to provide the highest level of asset protection for clients using the service. OFZ and other Russian fixed-income trades will be able to settle with Euroclear Bank; settlement risk should decline as settlement finality will be based solely on the National Settlement Depository’s records.љ Working directly with NSD is the best way forward to achieve the levels of efficiency, effectiveness and operational risk control that our clients expect. We welcome the decision taken by the Federal Service for Financial Markets to grant Euroclear Bank access to NSD.”
Eddie Astanin, Chief Executive Officer of Russia’s National Settlement Depository, commented: “Client abilities to conduct cross-border transactions in accounts opened with our organisations means increased transparency and, as a consequence, improved attractiveness of the Russian market for global investors. We expect this step will have a positive impact on exchange activities of Russian issuers, where they will reach a greater pool of national and foreign investors.”
Upon launch of the link with NSD, Euroclear Bank will have links with CSDs in 45 major countries. The Russian rubble is already one of 54 settlement currencies in Euroclear Bank.
NSD has links with CSDs/ICSDs in seven countries.
Russian on-exchange equity market capitalisation increased by 7,8% in the first half of 2012, reaching the equivalent of USD 539 billion. Total Russian debt outstanding is valued at USD 302 billion of which 58% are government bonds, with the remainder in exchange bonds, corporate and regional 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 the Russian market.
Note to editors
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 www.euroclear.com.
National Settlement Depository (NSD) is the largest settlement depository in Russia. It is part of theљ Moscow Exchange Group (recently formed by merger of MICEX and 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/