NSD User Committees to Consider Principles of Formation of Service Mix and Tariff Model for Integrated Depository

06 February 2012
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MOSCOW - National Settlement Depository (NSD), Russia's only settlement depository servicing the full range of debt and equity securities of Russian issuers, reports that on 17 January a joint meeting of members of NSD's User Committees and DCC's Committee of Major Participants was held. The participants of the meeting discussed principles of formation of a service mix and a tariff model for an integrated settlement depository to be formed on basis of NSD, DCC and Settlement Chamber RTS.

Principles of harmonization of services and formation of a new service mix of the integrated depository

  • Retaining popular services provided by DCC
  • Provision of services by NSD and DCC simultaneously during a period necessary for the clients' adaptation to the idea of the services provided by the integrated depository
  • The integrated depository's service mix is to include NSD's services, DCC's popular services and new services developed in line with the integrated depository's strategy.

Principles of harmonization of tariffs and formation of a new tariff model

The integrated depository's tariff model is to be formed on the basis of NSD's model:

  • The integrated depository's tariff model complies with best market practices;
  • The integrated depository's commission income covers operating costs to provide reliable and uninterruptable operations;
  • The integrated depository's commission income contribute to development of the settlement and depository services, as well as to the service quality improvement;
  • Flat fee for settlement services is applicable regardless of the value of transferred assets;
  • Discounts are available in the form of descending scale of safekeeping fees in respect of increasing volume of assets on deposit.

Principles of the integrated depository's tariff model with regard to depository services

Safekeeping of securities:

  • Establishment of tariffs in basis points of the market value of securities on deposit;
  • A descending scale providing discounts at the rate of tariff for safekeeping of securities in respect of increase in assets on deposit;
  • Differentiation of rates for safekeeping according to the types of securities;
  • Existence of Long Term Safekeeping Sections (LTSS) for long term safekeeping of shares:
    • Fee for safekeeping in LTSS is charged monthly for each securities issue, given that  the minimal fee is lower that current DCC's minimal securities safekeeping fee;
    • Fee for transferring securities is charged on basis of a flat fee for operations with securities on LTSS additionally to the tariff for an appropriate type of operation.

Operations:

  • Flat fee for conducting operations depending on the operation's type.

Other services:

  • Flat fee charged to an issuer using adjustment coefficients with regard to bonds' types and placement terms;
  • Provision of assistance in assigning international CFI codes to foreign financial instruments (flat fee).

Principles of the integrated depository's tariff model with regard to settlements and cash services

  • A structure of the settlement and cash services as well as tariff principles and terms comply with Russian banking practice;
  • Cancellation of an independent tariff for unpopular services or services bringing an insignificant income which are not billed by NSD, adding the expenses for these services to the "enlarged service" (for instance, "Account Maintenance") with further introduction of the independent tariff after automation of recordkeeping of operations and commissions;
  • Unification (classification) of tariffs for foreign currency operations denominated in rubles regardless of currency of the operations;
  • Introduction of increased/"prohibitive" tariffs for conducting operations on basis of paper documents;
  • Review of tariff levels:
    • in case of considerable foreign currency fluctuations;
    • in case of increased operating costs;
    • annually on basis of a rate of inflation.
  • Separate services can be provided to the clients using an individual approach.

The abovementioned principles are to represent a basis for the corporate solutions projects.

The presentation is available at NSD web site in the Materials and Presentations section.

About NSD

National Settlement Depository (NSD) is the largest settlement depository in Russia, a part of the MICEX-RTS Group, servicing on-exchange and OTC transactions with all types of debt and equity securities of Russian issuers and providing settlement services to participants in financial markets of the Russian Federation.

NSD provides storage of global certificates and depository accounting for 99% of corporate bond issues, sub-federal and municipal bond issues. It services 100% of transactions conducted in the federal bond and the Bank of Russia bond markets, more than 99% of transactions conducted in the corporate and regional bond markets, the majority of transactions with equities and also services UIT units and securities of foreign issuers.

In accordance with agreements concluded between NSD and the Bank of Russia, NSD acts as a settlement center for the organized securities market.

NSD is Russia's national numbering agency and the substitute numbering agency for the CIS, authorized to assign the international ISIN and CFI codes.

For further information about NSD: http://www.nsd.ru/ , or NSD Public Affairs Division: +7 495 232 0910,

Follow us in Twitter: http://twitter.com/NSD_News

About DCC

Depository Clearing Company (DCC) is Russia's largest settlement depository for shares. DCC provides a full range of settlement and depository services in the Russian securities market in compliance with accepted international standards.

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