Report on the Description of the National Settlement Depository Controls, Suitability of Controls Design and Operating Effectiveness,
12 October, 2015
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Internal control system
The NSD's internal control framework is a combination of internal control bodies and functional
areas designed to ensure compliance with the procedures aimed at achievement of objectives set
by the laws of the Russian Federation, regulations of the Central Bank of Russia, NSD's
incorporation and internal documents.
The Company's internal control system appropriately matches the nature and the scope of
NSD's business in their capacity as a non-banking lending institution, central depository,
professional participant of the securities market, and a clearing house.
The internal control is realised to ensure:
Efficiency and effectiveness of NSD's financial and operating performance when handling
banking and other transactions, and efficiency of assets and liabilities management
(including safeguarding of assets), as well as banking risk management;
Reliability, completeness, objectivity, and timeliness of preparation and submission of
financial, accounting, statistical and other reports (for both external, and internal users);
and information security (protection of NSD's interests (objectives) in the information
space, defined as a combination of information, information infrastructure, entities
engaged in collection, creation, dissemination and use of information, and a system of
regulation of relationships arising in this regard);
Compliance with regulatory and legal acts, standards of self-regulating organisations,
NSD's incorporation and other internal documents; and
Prevention of NSD's involvement and its employees' participation in any unlawful
activities, including money laundering and terrorism financing, as well as timely
submission of relevant information to government authorities and the Bank of Russia in
accordance with the Russian laws.
To ensure compliance with Regulation of the Bank of Russia dated 24/04/2014 N 242-P "On
Internal Control in Credit Institutions and Banking Groups", NSD has established the Internal
Control Department and Internal Audit Department, which operate on a permanent basis.
Information systems
The Company uses several information systems for the purpose of conducting its depository,
clearing, and settlement business. Since the Company predominantly operates with
uncertificated securities, the role of information systems for the Company's business is seen as
significantly increasing.
The Company's key information systems (its depository and settlement systems) are located in
the Data Processing Centre of Moscow Exchange. Data mirroring in the Moscow Exchange
Standby Data Processing Centre has been organised for the Company's information systems.
The Company and Moscow Exchange have signed an agreement for rendering services, which
provides for Moscow Exchange responsibility and liability in relation to the level of services for
the provision of server capacities.
The server room located at the Company's premises accommodates office systems, as well as
systems performing auxiliary functions for the Company's core systems.
