The National Depository Center and MICEX Settlement House began to provide settlement on Delivery versus Payment (DvP) principle in USD dollars and euro for OTC trades. This service is aimed to the authorized banks interested in DvP settlement of trades in USD dollars.
According to NDC Director Nikolai Egorov, “Settlement on DvP principle using technology offered by NDC allows to handle operations in real time on the STP basis. The main benefit of this project is minimization of risks that any counterparty will not fulfill its obligations to provide money or securities, as well as efficiency and reliability as settlement is provided by organizations (NDC and MICEX SH) specializing in depository and settlement activities and which use electronic document interchange and approved means of cooperation. At the moment trades settled on DvP principle account for 18% of OTC bonds market. Improvement of technological services can substantially increase number of trades in this segment”.
The settlement technology introduced by specialists from NDC and MICEX SH allows to provide simultaneous execution of obligations - transfer of funds from the buyer’s main account to the seller’s main account, opened at MICEX SH, against transfer of securities from seller’s securities account to buyer’s securities account, opened at NDC.
Would like to remind that DvP technology was developed by NDC as far back as in 2001 and in 2005 the number of trades settled using it per month has almost doubled. From the total traded amount of 141 billion rubles about 20% of trades were with shares and 80% - with bonds.
Information about MICEX Settlement House can be found at http://www.micex.com/rpmmvb/