National Settlement Depository (NSD) and Citibank have settled the first DVP-2 transaction in securities using correspondent accounts with the Bank of Russia.
The key advantage of NSD’s new service is an option to conduct DVP settlements in Central Bank money in accordance with best international practice.
The DVP-2 model allows to transactions to be settled with netting financial liabilities. The transactions may be conducted via different accounts: either using accounts opened with Bank of Russia, or via two types of accounts, one of which is opened with Bank of Russia, and another one – with NSD. Using correspondent accounts with Bank of Russia expands the range of settlements for NSD clients by retaining the reliability of classic DVP settlements and making money management more flexible.
“DVP-2 settlements held via correspondent accounts opened with Bank of Russia significantly expand opportunities for NSD clients and bring more flexibility and freedom in managing funds. The most important thing is that the new service also guarantees the reduced counterparty risk, speeds up settlements, and provides the transparency of the fees of the basic DVP model,” said Denis Buryakov, Managing Director for Depository Operations, NSD.
“This service enhances the attractiveness of the Russian securities market, including for foreign institutional investors, by offering one more flexible and efficient instrument for securities settlements that promotes development and harmonization of the OTC securities market,” added Anna Zubanova, Head of the Securities Department, Citibank.