- The value of securities under custody grew 14% and reached RUB 43.5 trillion
- NSD signed an agreement to connect Kyrgyzstan’s Bank of Asia to SWIFT via NSD’s service bureau
- Bank Saint Petersburg began using the collateral management services provided by NSD when conducting inter-dealer repo transactions
Central Securities Depository (CSD) services
In Q3 2018, the value of securities under custody reached RUB 43.5 trillion – this was a 14% increase as compared with the same period of 2017 (RUB 38 trillion). The number of foreign securities issues (ISIN) serviced by NSD grew 56% – from 7.6 thousand to 11.8 thousand.
The total number of securities issues serviced by NSD grew 33% – from 14.43 thousand in Q3 2017 to 19.1 thousand in Q3 2018.
In Q3 2018, the total number of companies which joined the centralized platform for record keeping and distributing UIT units reached 11 brokerage companies/nominees and seven asset management companies.
The first part of the functionality of the Web Client for depository and clearing services (DCS) was put into commercial operation. The DSC Web Client was developed on the basis of newest online technologies and the “thin client” architecture. It is implemented as part of the program for discontinuing the use of the LUCH software based on the “heavy client” architecture.
The number of inventory operations in the CSD increased 9% Y-o-Y and reached 850 thousand operations in Q3 2018 (compared with 781 thousand in Q3 2017), including 662 thousand exchange trade operations (+9%; 610 thousand operations in Q3 2017) and 188 thousand OTC trade operations (+10%; 171 thousand operations in Q3 2017).
In Q3 2018, the volume of DVP transactions reduced to RUB 1.8 trillion; this was 7% less than in Q3 2017 (RUB 2 trillion).
In Q3 2018, 604 meetings of security holders were held using e-voting technology. 96 repurchases of shares and 16 corporate actions to exercise the pre-emptive right to purchase shares were also initiated. In Q3 2018, the total value of repurchased shares reached RUB 29 billion.
In total, 3,535 corporate actions involving Russian securities were conducted in Q3 2018 (3,085 actions in the same period of the previous year). In Q3 2018, the number of corporate actions involving foreign securities grew 65% due to the increase in the number of securities issues serviced by NSD (from 3,749 issues in Q3 2017 to 6,198 ones in Q3 2018).
In Q2 2018, the amount of payments on Russian securities was RUB 5.5 trillion (RUB 3.9 trillion in Q3 2017). The amount of payments on foreign securities grew 132% and reached the sum equivalent to RUB 178 billion (as compared with RUB 76.9 billion in Q3 2017).
In Q3 2018, major Russian issuers, such as Alrosa and NLMK, used the E-voting option provided by NSD; it allowed security holders to participate in general meetings by means of filling in electronic ballots on NSD’s website.
Tri-party Services
In Q3 2018, against the background of increasing liquidity surplus, the value of repo transactions which the Federal Treasury performed using NSD’s collateral management system (CMS) reached RUB 5.9 trillion, and the value of repo transactions with the Bank of Russia performed using NSD’s CMS was RUB 39.6 billion.
The number of the OTC repo market participants who signed up for NSD’s CMS service amounted to 170 companies. Bank Saint Petersburg began using the collateral management service when conducting inter-dealer repo transactions.
In the reporting quarter, the value of Federal Treasury long-term repos with floating and fixed rates performed using NSD’s CMS stood at RUB 568.8 billion.
Repository
During Q3 2018, the number of trades registered with NSD’s Repository grew to 3.2 million (compared with 3 million in Q3 2017). The value of the transactions was 8% less than in the same period of 2017 – RUB 116 trillion (RUB 125.7 trillion in Q3 2017).
In Q3 2018, the top 3 instruments of registered transactions included:
| Instrument | Q3 2018 | Q3 2017 |
|---|---|---|
| OTC repos | 2,893,446 | 2,799,994 |
| FX forwards | 266,392 | 130,211 |
| FX swaps | 39,344 | 58,746 |
The top 3 instruments in terms of the volume of reported transactions included (RUB trillion):
| Instrument | Q3 2018 | Q3 2017 |
|---|---|---|
| OTC repos | 21.38 | 24.35 |
| FX forwards | 15.6 | 8.7 |
| FX swaps | 72.3 | 81.38 |
Against the backdrop of the increase in the number of reports submitted, the number of cancellations of erroneous messages reduced 49% (from 31,491 messages canceled in Q3 2017 to 15,906 messages canceled in Q3 2018). The formatting and logic check (FLC) service improves the quality of information sent by clients to NSD’s Repository, reducing the number of errors related to incorrect reporting deadlines, interest rates and trade types.
Information Services
In Q3 2018, the number of contracts concluded with information service users grew 37% Y-o-Y and reached 507 contracts. The highest growth of the number of users and subscribers (+ 97%) was demonstrated by NSD’s Valuation Center.
To develop a unified information environment for Russia’s post-trading system participants and a wide range of financial data users, as well as to simplify the procedure for disclosing information by Russian issuers, NSD and Interfax Group launched the Single Disclosure Window service. The service gives issuers the ability to disclose material facts and information about corporate actions in a convenient way via NSD. Implementation of the new disclosure instrument became possible due to regulatory documents amended by the Bank of Russia in August 2018 (Regulations 454-P and 546-P), which brought together requirements for formats, as well as the content of information on material facts and corporate actions.
In Q3 2018, NSD continued to expand the information represented in NSD’s professional information products. In particular, NSD’s API and DICS services were expanded by adding the fields “Multi-listing” and “Information feature,” which is to be filled based on material facts and data provided by issuers pursuant to Regulation 546-P, and by adding data in the sections “General information” and “Trading platforms.”
As part of the development of the ecosystem model, NSD expanded interactions with its partners specializing in information dissemination. The RU DATA service range was expanded considerably; a number of new products were presented to clients: RU Data NEXT, RU Data Price, RU Data Trading Results, RU Data Calendar, RU Data CAs, RU Data IFRS, and RU Data Ratings. In Q3 2018, users of the Cbonds website who were signed up for the NSD Valuation Center package of services began to receive information from the Valuation Center via their usual website sections (Bond Issue, Trading System Quotations, Watchlist, and Market Map).
In September 2018, to monitor and analyze the demand for different segments of NSD information services, the company allowed users of free services to authorize by registering at passport.moex.com.
Payment and Settlement System
NSD is Russia’s largest settlement non-banking credit organization in terms of the scale of settlement operations, capitalization, and the number of serviced participants in financial markets; it is also a nationally important payment system.
In Q3 2018, the value of money transfers reached RUB 89.2 trillion. The number of these transactions reached 300,256 thousand.
In Q3 2018, the value of DVP settlements using correspondent accounts with the Bank of Russia (settlements in central bank money) reached RUB 277.4 million; this was 158% more than in the similar period of 2017.
National and Substitute Numbering Agency, and the accredited Local Operating Unit (LOU)
NSD is the first and only company in Russia and the CIS countries that has received an accredited LOU status. This is a permanent status which replaced the temporary one (pre-LOU). It confirms NSD’s compliance with GLEIF’s regulatory and technological requirements for a LOU.
In Q3 2018, NSD assigned 22 new LEIs, verified 105 LEIs, and accepted for servicing three LEIs previously serviced in other LOUs. LEIs assigned by NSD are recognized by regulators, market participants, and LOUs of other countries.
NSD continues to act as Russia’s Numbering Agency and as the substitute numbering agency for CIS countries, assigning ISINs, CFIs, and FISNs.
In Q3 2018, NSD assigned 361 ISINs, CFIs and FISNs to Russian financial instruments and two respective codes to financial instruments of CIS countries. In Q3 2018, the number of qualified foreign securities amounted to 1,679 securities.
Technological services
NSD as the central infrastructural link of the financial market pays special attention to the development of the reliable IT platform and partner programs, and ensures the high level of information security.
In Q3 2018, the total number of users of SWIFT services provided by NSD’s SWIFT Service Bureau reached 65. The Service Bureau clients’ average daily traffic increased 28% compared with the same period of 2017 and reached 317,940 messages per month. National Settlement Depository signed an agreement to connect Kyrgyzstan’s Bank of Asia to SWIFT via NSD’s service bureau.
NSD continues to implement the Transit 2.0 project (a platform allowing banks and corporations to exchange financial messages) which will reduce corporate clients’ expenses for interactions with settlement banks focused on the receipt and delivery of payment documents. The first pilot launch of the technology is to be held in December 2018.