NSD launches DVP settlement service using the Bank of Russia’s real time gross settlement system
Starting 30 March 2015, National Settlement Depository (NSD), Russia’s central securities depository, will provide credit organisations with an opportunity to conduct settlements on transactions with securities on the basis of DVP model 1 using correspondent accounts opened with the Bank of Russia.
The new service expands a range of settlements available for NSD’s clients and combines the advantages of reliable DVP settlements with flexible cash management.
"Implementation of the technology of settlement in central bank money is an important step toward development of the market infrastructure, bringing it into compliance with standards including the international ones. Thomas Murray, the international agency assigning ratings to central securities depositories, takes into account an opportunity of settlement in central bank money provided by a CSD to its clients," said Maria Ivanova, vice president, business development and client relations, NSD.
In international practice, this technology is called settlements in central bank money; it allows reducing counterparties’ costs associated with settlements due to mitigating an impact of commercial settlement organizations’ (banks’) risks on settlements. Therefore, these settlements are mostly held in the course of major transactions.
The new service allows to conduct settlements between NSD clients’ accounts opened with the Bank of Russia or between two accounts, one of which is opened with the Bank of Russia and another one – with NSD.