Single Account

Automatic cash and securities transfers between NCC and NSD.

Moscow Exchange offers the automatic transfer service for cash and securities transfers between NCC and NSD clearing houses. The idea behind the service is to concentrate assets at NCC where they could be used not only to settle trades, but also as collateral either for open trades or for making new trades. For the purposes of settlement of trades to be cleared by NSD, the required amount of assets will be allocated. Cash funds or securities received from counterparties in trades cleared by NSD will be returned to NCC.

Thanks to the service, clients benefit from time and funding cost savings.

The service is fully customizable depending on the client's business specifics: it is possible to automate transfers either in one direction only or in both directions and either for one or more than one asset/account, and to choose a time schedule and calculation method for transfers. The Single Account service allows clients to adjust their settings on-the-fly (e.g., to remove any securities issues/accounts from the scope of automatic transfers).

Clients

  • Dealers involved in proprietary trading in the on-exchange or OTC market segments
  • Brokers who segregate clients' assets and make B2B trades
ISSUES SOLUTION:
«Single Account»
BENEFITS
  • Interest expenses resulting from separate funding of on-exchange and OTC settlements on a gross basis;
  • Time and resources are required to control balances and to make manual transfers;
  • Transactional errors and risks of delays in settlement, potential fines imposed by counterparties;
  • Twofold increase in time and costs required for client.
  • Funding cost savings;
  • Speed-up of trade settlement thanks to quicker transfers;
  • Freeing of resources thanks to transfer automation on the side of infrastructure;
  • Reduced operational risks (such as errors in manual transfers, delays in giving instructions, communication problems);
  • Cheaper transfers: the client does not need to give further instructions to the custodian, as transfers are made on the basis of a standing instruction.

How does the Single Account operate?

Clients' cash funds and securities are concentrated at NCC.

For the purposes of settlement of OTC trades at NSD, assets are allocated from the client's accounts with NCC.

As soon as OTC trades are settled, assets are automatically returned to the accounts with NCC.

It is possible to use only some parts of the service: NSD->NCC or NCC->NSD transfers; securities transfers or cash transfers.

Problem addressed by the Single Account service

The law requires that clients open a separate trading account with each clearing house, which impairs the effectiveness of on-exchange and OTC trades to be settled on a DVP basis.

Single Account: automatic cash transfers
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Single Account: automatic securities transfers
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Automatic transfers between NSD and NCC
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Automatic cash transfers:

Service Transfer direction Quantity of securities to be transferred When is a transfer made? How to activate the service? Fee

Liquidity management
Presentation

NSD -> NCC

Options:
  • Account balance
  • Account balance less scheduled deliveries
  • Amount required for the DVP1 trade
  • Cash margin amount
Options:
  • After NSD's session
  • After the settlement of the relevant DVP1 trade
  • After the cash margin settlement

Give instruction 18/ROUT (cash transfers from NSD to NCC)

NSD charges the standard fee applicable to internal transfers between bank accounts

Liquidity management
Presentation

NCC -> NSD

Опции:
  • Amount required for the DVP1 trade
  • Amount required for the clearing session on a gross basis
  • Amount required for the clearing session on a net basis
  • Amount of income on the securities provided as collateral
  • Cash margin amount

Either before the clearing session, or before the settlement of the DVP1 trade, or before the cash margin settlement

  1. Give instruction 18/RINN (cash transfers from NCC to NSD)
  2. Sign up for the Single Account service at NCC

NSD charges the standard fee applicable to internal transfers between bank accounts

Securities transfers:

Service Transfer direction Quantity of securities to be transferred When is a transfer made? How to activate the service? Fee

Standing instruction for securities transfers
Presentation

NSD -> NCC

Options:
  • Account balance
  • Account balance less scheduled deliveries
  • Quantity of securities received from a DVP1 trade or as collateral substitution
Options:
  • Immediately after the trade is cleared by NSD
  • Before NCC's clearing session at 17:00
  • As soon as the securities received from the DVP1 trade or as collateral substitution are credited

Give a standing instruction for securities transfers

NSD charges the standard fee applicable to book-entry transactions (similar to client's regular transactions)

Securities allocation for clearing at NCC
Presentation

NSD -> NCC

Quantity of securities to be delivered by the client to the central counterparty, less the securities balances in client's sub-accounts 36 and 31

At 16:45, before NCC's clearing session
At 18:45, before NCC's clearing session

Securities marking for 'Clearing by NCC'

RUB 240, regardless of how many securities issues are transferred

DVP settlement with securities allocation
Presentation

NCC -> NSD
NSD -> NSD

Quantity of securities to be delivered by the client to the counterparty, less the securities balance in the client's account

Either before NSD's clearing session, or before the settlement of the DVP1 trade*

  • Securities marking for 'DVP trades'
  • In instruction 19/0 or MT 543, select your preferred allocation option

RUB 240

Securities allocation for repo trades with a securities basket

NCC -> NSD
NSD -> NSD

In the marking line with priority 1, select either the securities with a lesser haircut and a greater value, or the securities indicated at the time of the marking

Either before NSD's clearing session, or before the settlement of the DVP1 repo trade*

Securities marking for repo trades:
  • Inter-dealer repo trades
  • Repo trades with the Bank of Russia
  • Repo trades with the Federal Treasury

The service is covered by the fee charged for collateral management services

* With the consent of NCC, only for the quantity of securities that have not been provided as collateral for trades with the central counterparty.

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