Electronic Matching services simplify securities settlement procedures within NSD. NSD provides clients with information about potential matching instructions — unmatched instructions that differ from the original by one field or one group of fields. Search for potential matching instructions (electronic matching) is carried out for FOP operations (operation codes 16 and 16/1) and DVP operations (operation codes 19/0 and 19/1) when using matching by "trade date".

Electronic matching is a mandatory process in the lifecycle of each instruction when matching "by trade date". If there is a potential matching instruction in the NSD system, clients receive Notifications about potential matching instructions in GS036 and MT548 formats depending on the communication channel selected in the EDQ Questionnaire or established in the instruction for operation code 97 "Changing the Procedure for Submitting Reports and Other Documents".

Electronic matching of instructions at NSD allows clients to:

When searching for potential matching instructions, certain fields in client instructions must match, while other remaining fields may differ.

Potential matching instructions are considered those in which all the above fields necessarily match and no more than one field or one group of fields listed below differs.

Depending on the weight of differing fields, NSD calculates instructions that are closest to each other. Relevant instructions are those where the weight of differing fields is maximum. If there are two or more instructions with equal weights of differing fields, the first instruction received by NSD is considered the most relevant.

For group matching of fields with discrepancy codes SAFE and NCRR, the corresponding block of information from one instruction is compared with the block of similar information in the matching instruction. If there are discrepancies in any of the fields or in all fields from the specified block, a report is sent with one discrepancy and the corresponding error code.

Matching instructions may differ in cash settlement terms, with one party to the transaction intending to settle on DVP terms and the other on free of payment terms (FOP). In this situation, a Notification about potentially matching instructions is generated with discrepancy code FRAP. Matching is carried out according to the following algorithm: instructions 16 are matched with instructions 19/1 or instructions 16/1 are matched with instructions 19/0, while such instructions must have "trade date" filled and "reference" field not filled for 16x operations and "transaction No." for 19x. For this case, matching instructions must necessarily have matching depository account numbers and account sections, securities and their quantity, trade date and settlement date, while all other fields may differ.

More detailed information on the procedure for interaction with depositors and document forms can be found at the following links:

• List of documents provided and received by Clearing Participants in accordance with NKO AO NSD Clearing Rules is located in the "Documents / Clearing Activities" section.

• Procedure for Interaction between the Depository and Depositors during Implementation of NKO AO NSD Depository Activity Conditions is located in the "Documents / Depository Activities" section.

For all depository accounts, NSD sends notifications about relevant matching instructions. At the client's request, they can choose another report option — about all potential matching instructions. To do this, the client must submit an instruction to NSD in form AF093 (operation code – 93) specifying one of the values of the "Notification about Potential Matching Instructions" parameter:

1. Include one instruction (option "include one instruction" – used by default), if the client wants to receive notification about one, most suitable matching instruction

For each client instruction, if potential matching instructions were found for it, NSD sends a notification about one (relevant) matching instruction:

The Notification contains information only about the relevant instruction (one matching instruction with maximum weight of differing fields). Notification about the relevant instruction is updated only when an instruction with a higher weight of differing fields is received.

If the relevant instruction was matched or cancelled, the Notification about the relevant instruction will be updated if there is another potential matching instruction in the system.

If the relevant instruction was matched or cancelled and there is no other potential matching instruction in the system, the Initiator receives a Notification about Absence of Matching Instruction GS036 or MT548 (NMAT//CMIS).

2. Include all instructions (option "include all instructions"), if the client wants to receive notification about all potential matching instructions

For each client instruction, if potential matching instructions were found for it, NSD sends a Notification about Presence of Potential Matching Instructions:

The Notification contains information about all selected potential matching instructions, with the relevant instruction separately marked (matching instruction with maximum weight of differing fields). Notification about all potential matching instructions is updated upon receipt of each new potential matching instruction, as well as upon cancellation or matching of one of the instructions previously reflected in such Notification.

Option selection is carried out for each individual depository account. If the client has not submitted an instruction in form AF093, notifications about potential matching instructions are provided to the client according to option 1.

Matching and securities settlement processes are unified for free of payment (operation codes 16 and 16/1) and for delivery versus payment (operation codes 19/0 and 19/1), namely: