The National Depository Center (NDC), Russia's only settlement depository servicing the full range of debt and equity securities of Russian issuers, and Russia’s Professional Association of Registrars, Transfer Agents and Depositories (PARTAD) announced today that they have agreed on a program to promote improvements in Electronic Data Interchange (EDI) standards in Russia’s financial market. According to the results of the negotiations held in November 2008, the parties have agreed to coordinate their efforts aimed at implementation of EDI between all categories of market participants on the basis of Straight Through Processing (STP). The coordination of the efforts will be based on the following five principles:
1. Focusing on results. The process of EDI implementation in the Russian market has taken over 15 years thus far. The joint contributions of NDC and PARTAD have led to the development, approval and implementation of unified EDI standards for core participants in Russia’s settlement system including settlement depositories, custodians and registrars. NDC and PARTAD intend to do their best to improve the quality of services and increase the amount of data processing in this segment.
2. Strengthening of Russian market’s competitive advantages. Most Russian securities are issued in electronic form. The parties assume that this significant competitive advantage should be efficiently used in the implementation of further plans for the development of an international financial center in Russia.
3. Optimal balance between Russian and international standards. Efficient integration of the Russian market into the global system is not possible without usage of international standards in the financial market and adaptation of national standards to the foreign investors’ requirements. The parties stressed that according to foreign experts a considerable part of Russian internal EDI standards already conforms to international requirements. In particular Russia was one of the first countries which accepted ISIN (ISO 6166) and CFI (ISO 10962) codes as a basis for its securities accounting. Thus the principle of the national EDI standards’ strict conformity with international practice and with ISO standards should be used by all Russian market participants and their associations involved in EDI implementation. NDC and PARTAD agreed to exchange EDI standards implementation programs in order to take into consideration expert opinion and the practices of the companies’ partners in Russia and abroad.
4. STP development. EDI is one of key factors of STP implementation. In its turn STP provides for:
- business scalability,
- decreased operating risks,
- increased numbers of operations simultaneously with lower data processing rates and operating costs,
- increased efficiency for all market processes.
Accordingly the parties have affirmed their willingness to support the implementation of programs aimed at implementation of STP in the Russian financial market.
5. Increased efficiency in interactions. The parties confirmed their commitment to the basic principles of cooperation aimed at increased efficiency in interactions between market participants including improved corporate governance, increased transparency of decisions, compliance with ethical standards, improvements in technologies and legislation. NDC and PARTAD regard these tasks and principles as challenges for both Russian and other countries’ financial markets. In particular, the managements of NDC and PARTAD will do their best to provide agreeable terms for cooperation aimed at the achievement of positive results, improvement of EDI and regulations on the Russian market.
Nikolay Egorov, Director, NDC, pointed out: “NDC and PARTAD play a leading role in the development of Russian EDI standards. Currently and in the future, the financial infrastructure can not allow itself to have multiple technological standards. Consolidation, integration and unification are not just words; they are supported by technical solutions, organizational principles and first of all by standards. It was very important to agree on unified principles and ISO priority, in other words, on the adaptation of international standards to Russian legislation, the Cyrillic alphabet and other special issues.”
Viktor Pleskachevsky, Chairman of the Board of Directors, PARTAD, added: “Development of professional standards has been a core area of PARTAD activities for almost 15 years. In recent years the issues of unification of EDI have been becoming more and more important. PARTAD’s efforts in the field of electronic document format development became more important after approval of new versions of the Law “About Investment Funds” and the Law “About Non-State Pension Funds.” A mutual understanding with NDC as a settlement depository able to be one of the most important ‘gateways’ providing for the conversion of national standards into the international ones and vice versa allows PARTAD and NDC to focus on the unification of electronic messaging on the basis of ISO. PARTAD and NDC will be preparing necessary changes to the current regulatory system. PARTAD is also planning to interact with other centers of EDI unification.”
Not-for-Profit Partnership “The National Depository Center” is the largest settlement depository in Russia, servicing the full range of debt and equity securities of Russian issuers. NDC 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, and more than 99% of stock exchange transactions with equities and OTC trades. The international rating agency Thomas Murray has assigned NDC an АА- rating as a central depository. NDC is Russia's national numbering agency, and the substituting numbering agency for the CIS, authorized to assign the international ISIN and CFI codes.
Among NDC’s founders are MICEX and Bank of Russia (the founders’ shares in the property of NDC are 46.67% and 39.35% respectively, and in the votes 50.16% and 42.3% respectively). Members include GPB OJSC (Gazprombank), Evrofinans Mosnarbank, Rosbank, VTB Bank (Vneshtorgbank), Bank of Moscow, Rossiysky Credit Bank, Vnesheconombank, ING Bank Eurasia, JP Morgan Bank International LLC, UniCredit, Deutsche Bank, and Sberbank. The Partnership also has stakes in Depository Clearing Company CJSC (37.29%), in Settlement Depository Company CJSC (28.54%) and in Bank "National Clearing Centre" CJSC (0.27%).
For further information about NDC: www.ndc.ru, or NDC Public Affairs Department: +7 495 232 0910, .
The Professional Association of Registrars, Transfer Agents and Depositories (PARTAD) is one of the first self regulated organizations (SRO) in Russian securities market. Today PARTAD unites the leading infrastructure organizations providing 75% of all registrar and special depository services and over 50% of all depository services in Russia. PARTAD as a self regulated organization has permission for operations issued by Federal Financial Markets Service (FFMS). The Association is a center for the collection of accounting statements of securities market participants (in electronic form) and is an agency certifying the specialists in the securities and pooled investments markets.
PARTAD is the only self regulated organization which has developed professional standards for its members which include registrars, depositories, special depositories, clearing organizations. The Association also controls the compliance of its members’ activities to these standards.
PARTAD has developed and implemented EDI formats for registrars and nominee holders, and for participants in the pooled investments market. It has formed and supports online databases such as Russia’s Registrars Database, Russia’s Depositories Database, Database of Registrars, Issuers, Re-registration agents and Nominees. It is an organizer of National Ranking of Registrars, Depositories and Special Depositories jointly with Infrastructure Institute. The Association issues the guide “Infrastructure of the Securities Market”, as well as various other analytical and educational materials.
PARTAD is represented in the FFMS’s Financial Market Participants Council, Expert Councils of the Ministry of Economic Development and Federal Anti-Monopoly Service, in the State Duma’s Property Committee, Federal Assembly’s Council for Financial Markets and Monetary Circulation, and in Coordination Council of Anti-Money Laundering Commission of Russian Financial Monitoring Agency.
For further information about PARTAD: www.partad.ru