NSD Sends Valuation Center’s Documents to the Bank of Russia for Accreditation

16 September 2016
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On 15 September 2016, as part of the process of assessing the quality of the functioning of NSD’s Valuation Center, a set of documents was sent to the Bank of Russia to receive official accreditation pursuant to the Bank of Russia’s Letter dated 29 March 2016.

The accreditation documents sent to the Bank of Russia included:

  1. The Valuation Center’s Method for determining the value of a bond currently used by NSD for calculating the value of financial instruments as part of the Valuation Center’s product;
  2. The independent organization’s report on the compliance of the calculation of financial instruments’ values with the method;
  3. Documents regulating the Valuation Center’s terms of services provided to users, a procedure for approving and putting the method into effect, the organization of the Valuation Center’s work associated with collecting, processing, storing, and disclosing information, including criterion for selecting information sources used to determine the value of financial instruments, and the organization of the Expert Council’s activities.

Thus, if the Bank of Russia grants accreditation, NSD’s Valuation Center and the values of bonds calculated by it on the basis of the method for determining the value of a bond approved by the Center’s Expert Council will receive official status.

Believing it necessary to constantly improve its methodological base, NSD’s Valuation Center now develops a new bond valuation method for use in repo transactions. The criterion of the acceptability of valuations is an opportunity to sell one lot of bonds with a nominal value in the range of RUB 20-50 million (rouble-denominated equivalent) within a trading day on the price calculated in accordance with the method.

NSD’s Valuation Center’s priority is developing a method for determining the values of bonds included in the Bank of Russia’s Lombard List.

When forming the new method, NSD focuses on the acceptability of values for repo market participants, including the Bank of Russia and the Moscow Exchange Group’s companies. It is anticipated that information supplied by NSD’s Valuation Center will be used in numerous repo market services as one of the priority sources of determining the values of bonds after the market price.

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