The first constituent entity of the Russian Federation – the St. Petersburg Committee of Finance – joined NSD’s platform that allows investing in repo transactions using NSD’s collateral management system (CMS). The pilot repo auction was held on 5 July 2019: RUB 3 billion of St. Petersburg’s temporarily available budget funds were placed in full among borrower banks; the amount of bids submitted by credit organizations exceeded RUB 3 billion. Bank Saint Petersburg was one of the most active participants in the new instrument’s preparation and launch procedure.
“The new instrument will allow us to expand the range of tools to place city budget funds, to mitigate risks that emerge when we place St. Petersburg’s temporarily available budget funds in unsecured bank deposits, to admit more credit organizations to submit bids for repos, and, consequently, to increase the profitability of budget liquidity management operations,” said Alexey Korabelnikov, Chairman of the St. Petersburg Committee of Finance.
“The platform has already proven successful when the Bank of Russia and the Federal Treasury have placed their liquidity in repo transactions. The St. Petersburg Committee of Finance’s participation in the platform allows credit organizations to use the new source to attract liquidity via familiar collateral management technologies provided by NSD. They include the basket of securities used as collateral with an option to replace securities during the repo transaction, the maintenance of the collateral level via daily revaluation based on market prices, protected DVP settlements, and automatic reports to the Repository,” added Alina Akchurina, Managing Director for Collateral Management and Tri-Party Services, NSD.
Assets worth more than RUB 230 trillion have been placed using NSD’s CMS platform since its launch in 2013.