On 12 April, the 7th Exchange Forum covering national economy and financial market issues was held in Moscow. This is one of the largest financial conferences in Russia, and this year the event confirmed its status, bringing together a record number of participants: 2,000 representatives of regulators, banks, brokerage companies, Russian and international funds, as well as independent experts and analysts.
At the plenary meeting, the delegates considered issues of the Russian financial sector’s development in the situation of global market instability and geopolitical tensions, and discussed opportunities for stimulating economic growth and increasing investment activity. Among the invited speakers were Alexey Kudrin, Chairman of the Supervisory Board of the Moscow Exchange; Elvira Nabiullina, Governor, Bank of Russia; Arkady Dvorkovich, Deputy Prime Minister of the Russian Federation; Anton Siluanov, Minister of Finance of the Russian Federation; Alexander Novak, Minister of Energy of the Russian Federation; Petr Aven, Member of the Board of Directors, Alfa-Bank Banking Group.
National Settlement Depository (NSD), a part of the Moscow Exchange Group, traditionally has taken an active part in the forum. This year, NSD organized a panel session “Regulation, New Markets, Financial Innovations”; it brought together representatives of Russian and foreign leaders in the post-trading and investment industries, including:
- Eddie Astanin, Chairman of the Executive Board, NSD, the panel session’s Moderator;
- Elena Chaikovskaya, Director of the Financial Market Development Department, Bank of Russia;
- Paul Bodart, independent advisor;
- Serge Christ, Vice President, Clearstream;
- Miguel Ferreira, Head of UK Ireland CI Russia and Japanese in Europe Sales & Relationship Management, Euroclear;
- Mohamed Salam, Chairman of the Board of Directors, Managing Director, MCDR (Egypt);
- Denis Shulakov, First Vice President, Gazprombank;
- Igor Danilenko, Managing Director, Fosun Eurasia Capital;
- Ruben Lee, CEO and Founder, Oxford Finance Group;
- Maria Krasnova, Deputy Chairman of the Executive Board, NSD.
Representatives of the global financial sector initiated a multifaceted discussion on a wide range of topics: from regulation to new technologies.
In recent years, the key topic discussed by the financial community was foreign investors’ attraction to the Russian market, in particular, investors from Asia. Panel session participants considered this issue in terms of infrastructure’s role in increasing market attractiveness. Experts agreed that over the past years a lot has been done in Russia in this sphere. This process should not stop: crises are cyclical by nature, and the economic situation will improve sooner or later. It is very important to provide investors with the most convenient environment in respect to record keeping and settlement infrastructure, to protect and exercise their rights, to guarantee them convenient trading, and to present them with information about financial instruments and issuers. Historically, the emergence of central securities depositories has allowed cross-border investments to expand. Regulatory representatives also stated that the infrastructure should be well-developed and efficient, and at the same time, very simple and user-friendly.
The NSD session included international delegates. This allowed participants to learn first-hand about new trends in the sector, as well as the opinions of leading international players. Experts shared their views on the industry’s development and discussed initiatives, such as TARGET2-Securities (T2S) and the new European CSD Regulation (CSDR). The delegates agreed that a low level of competition in the global post-trading industry existed; and that this should be increased. For example, the European Central Bank’s T2S project is aimed at strengthening competition among European CSDs and reducing investors’ expenses to settle transactions.
The delegates paid particular attention to financial technologies and their role in the global post-trading industry. In particular, experts discussed the issue of blockchain technology. Eddie Astanin presented NSD’s new project: a prototype of e-proxy voting at bond holder meetings, based on the blockchain technology. The Chairman of NSD’s Executive Board noted the success of the pilot project that allowed the Company to make positive conclusions about the use of this technology in the settlement infrastructure. The panelists agreed that the financial sector, despite its inherent conservatism, is often an active driver of innovation, especially within the technological sphere. The use of the blockchain technology in securities settlement is now a subject of lively discussion; however, it is widely used in payment systems.
Another important topic that was discussed was the corporate actions reform in the Russian market that started in 2014. It includes measures aimed at improving regulations and technologies allowing corporate information to be collected and distributed, and corporate actions to be processed. All this will improve the process of exercising security holders’ rights and increase the corporate governance level on the Russian market. Maria Krasnova, Deputy Chairman of the Executive Board, NSD, shared the first results of the reform and announced further steps in this direction. Discussion participants agreed on the importance of increasing the corporate governance level on the Russian market and concluded that the corporate actions reform should contribute to an increase in foreign investors’ trust in Russian assets.
In addition, NSD and the Central Securities Depository of Egypt (MISR) signed the Memorandum of Understanding at the Exchange Forum. The parties agreed to exchange in experience and information, to cooperate in the sphere of depository and settlement operations, operational interactions, corporate action processing and information services. Moreover, CSDs of Russia and Egypt will cooperate within the framework of the World Forum of CSDs.