First time enhanced conversion of depositary receipts will be available on local market
LONDON/MOSCOW, 17 December 2013 — Russian-based investors and brokers will be able to issue and cancel depositary receipts (DRs) in Russian companies thanks to a ground-breaking agreement between the National Settlement Depository (NSD), Russia’s central securities depository, and BNY Mellon.
The two companies have developed an innovative structure by which DRs, issued by BNY Mellon on shares of Russian companies, can be converted into a share or vice versa in Russia within one business day; this process currently takes between two and three business days. The structure will allow DRs to trade on the secondary market, settle and be used as collateral in repurchase agreements (repos) by Russian market participants in their own time zone.
“We believe it will provide an added value service for our customers,” said Eddie Astanin, Chairman of the Executive Board of NSD. “As a consequence we expect to see increased interest from global investors working with depository receipts in the Russian securities market.”
BNY Mellon will act as custodian for NSD and depositary bank for DRs trading in the Russian market. The NSD is the central securities depository of the Russian Federation and part of the Moscow Exchange Group. BNY Mellon is the global leader in investment management and investment services, and acts as depositary bank for the majority of DR programmes of Russian companies.
“This is a revolutionary solution for the capital markets because it’s the first time a DR will trade on its local market”, observes Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. “DR’s trading in multiple markets at the same time is also a relatively new concept. This is another step towards the idea of a global security which allows investors to transcend geographical borders.”
Notes to editors:
About BNY Mellon
BNY Mellon acts as depositary for more than 2,700 American and global depositary receipt programs, acting in partnership with leading companies from 68 countries. BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of September 30, 2013, BNY Mellon had $27.4 trillion in assets under custody and/or administration and $1.5 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com or follow us on Twitter @BNYMellon.
National Settlement Depository (NSD) is the central securities depository of the Russian Federation, a part of the Moscow Exchange Group. NSD was founded on 27 June 1996.
NSD is Russia's national numbering agency and the substitute numbering agency for the CIS, authorized to assign the international ISIN and CFI codes. The international rating agency Thomas Murray has assigned NSD an AA- rating as a central securities depository. Total value of assets on deposit with NSD amounted to RUB21.2 trillion as of 30 November 2013.
The status of central securities depository was assigned to NSD by the Russian Federal Financial Markets Service’s order #12-2761/PZ-I dated 6 November 2012.
NSD holds professional securities market participant license #177-12042-000100 for depository operations issued by the Russian Federal Financial Markets Service on 19 February 2009, license #3294 for bank operations issued by the Central Bank of the Russian Federation on 26 July 2012 and license #077-00004-000010 for the clearing activities issued by the Russian Federal Financial Markets Service on 20 December 2012.
For more information, please, visit www.nsd.ru