MICEX SH & NDC – on the way to merge
By: Sergey A. Sukhinin
Chairman of the Board Executive, CEO
MICEX Settlement House
MICEX Settlement House is
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The biggest Russian non-banking credit institution
• Effecting settlements in all MICEX markets: for
government and corporate securities, foreign
exchange, derivatives and commodities
• Effecting settlements in OTC markets: DVP transactions
of NDC participants, REPO deals with the Bank of
Russia, deposit and loan transactions of the Bank of
Russia
• Providing full range of settlement services to more than
880 financial institutions all over Russia including the
biggest ones
Authorized Settlement Center in Organized Securities
Market nominated by the Bank of Russia
Ranking among 30 biggest Russian credit institutions
“The National Depository Center”
(Closed Joint Stock Company) is
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The leader of the Russian securities settlement
infrastructure with a public CSD Rating of AA– issued by
Thomas Murray (Stable outlook)
The settlement depository of the MICEX Group
The Russia`s sole settlement depository servicing all types
of securities and ensuring settlements of 100% of trades
on the government bond market, more than 99% of trades
on the corporate bond and municipal bond markets,
majority of transactions with equities traded on the stock
market, as well as transactions with UIT units and
Eurobonds
The National Numbering Agency for Russia, responsible
for assignment of ISINs and CFI codes to Russian financial
instruments and the Substitute Numbering Agency for CIS
countries
MICEX SH & NDC regional network
MICEX SH Head office
(Moscow )
NizhegorodskyBranch
(Nizhniy Novgorod)
Samarskiy
Branch
(Samara) Uralskiy Branch
(Ekaterinburg)
Rostovskiy Branch
(Rostov-on-Don)
Sibirskiy Branch
(Novosibirsk)
Primorskiy Branch
(Vladivostok)
MICEX SH’s basic financials
as of 01 January, 2010 (in millions)
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Average assets – RUB 160 000 (USD 5 300)
Average Equity – RUB 3 700 (USD 123)
Average Funds with the Bank of Russia and in
correspondent accounts with prime foreign banks –
RUB 1 002 000 (USD 33 195)
Daily average turnover through customers’ accounts –
RUB 1 206 000 (USD 39 953)
Daily average turnover through correspondent account
with the Bank of Russia – RUB 878 700 (USD 29 110)
Net profit for the year – RUB 1 791 (USD 59)
NDC’s basic financials
as of 01 January, 2010(in millions)
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Equity – RUB 2 174 (USD 72)
Net profit for 2009* – RUB 481 (USD 16)
Revenue for 2009*: – RUB 1 275 (USD 42)
Total value of securities held - RUB 6 270 000 (USD 207 718)
* - In connection with the reorganization of NDC from Not-for-Profit Partnership into Closed Joint Stock Company in 2009
and for purposes of comparability with the data for the same period of the previous year, for 2009 the cumulative results
of operations were presented according to financial statements for the relevant periods.
MICEX Settlement House`s & NDC’s
customer base as of 01 January 2010
Banks
(530)
Total
892 NDC
participants
Total
885 customers
of MICEX SH
Other
financial
institutions
(350)
MICEX
Group
affiliated
companies
(5)
Functional organization of settlements
within MICEX Group
Bank of
Russia
Moscow region
electronic
settlement system
Interregional electronic
settlement system
Client-Bank remote access
facilities
RTGS system
(“BESP”)
S.W.I.F.T.
Russian
Clients
MICEX
SH
Telex
S.W.I.F.T.
Foreign
bank
S.W.I.F.T.
Foreign
bank
Internet
Intranet
MICEX
communication
system
MICEX
NCC
8
8
Data exchange with MICEX
depository-trading system
NDC
Basic features of settlements
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Securities are held with and settled through the NDC
Cash is deposited with and settled through the MICEX SH
DVP settlement using accounts with NDC and MICEX SH for almost 100%
of on-exchange trades
No credit risks on NDC and MICEX SH
Need to fulfill certain legal requirements on currency regulation
On-exchange trades
• 100% pre-depositing of cash and securities assets - T+0 (same day)
exchange trade settlements
• Partial pre-depositing of cash and securities assets - T+n exchange
trade settlements
• Settlement currency is Russian ruble for most of trades
• Own funds have to be transferring from current accounts to trading
accounts on daily basis - if they are not allocated yet
For OTC trades FOP settlement in ruble and foreign currency and DVP
OTC REPOs collaterized by corporate Eurobonds.
Safety and reliability of settlements
• MICEX SH maintains minimum obligatory liquidity ratio at 100%, does not
effect any investment activity thus does not carry any credit risks
• Back-up procedures are in place for all data
• E-documents exchange is protected by certified encryption mechanism
• Alternative communications channels are provided
• Settlement procedures are fully automated
Operational efficiency &
beneficial conditions of settlement services
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Real time book transfer of funds settled between MICEX SH’s customers
Real time settlements through the Bank of Russia’s BESP system –
MICEX SH is a direct participant of BESP
Extended operational deadlines for payments in Russian ruble and foreign
currencies:
• RUB – 20:30
• USD – 20:30
• EUR – 16:00
• CHF – 14:00
Upcoming implementation of new RUB payment documents formats by
the Bank of Russia will simplify input of payment instructions in RUB, in
particular for non-Russian customers, and allow STP for such payments
* For non-resident customers the deadlines are shifted back for 30 min,
required for currency control purposes
MICEX SH & NDC merging: benefits
• Creation of full-fledged Russian CSD providing full range of
settlement services
• Improvement of existing services – simplification of DVP
models
• Introduction of new services like securities lending & borrowing
and settlements with participation of CCP
• Raising capitalization of NDC
• Improving perception of the Russian financial infrastructure
globally
Contacts
MICEX SH
1/13, stroenie 8, Sredniy Kislovskiy Pereulok, Moscow 125009, Russia
Administrative +7 495 705 9619
Correspondent Banking +7 495 745 8987
Fax: +7 495 745 8122
SWIFT: MICURUMM
Теlex: 485391, 485393 MICU RU
http://www.micex.ru/group/settlementhouse/portrait
NDC
1/13, stroenie 4, Sredniy Kislovskiy Pereulok, Moscow 125009, Russia
Service Development & Client Relations : +7 495 232 05 14
Customer Services : +7 495 956 2789
Corporate Actions and Issuer Relations: +7 495 232 5253
Public Affairs: +7 495 232 0910
Fax: +7 495 745 8122
http://www.ndc.ru, http://isin.ru