National Settlement Depository: Key Insights on Infrastructure Development
The integration of businesses and the creation of the National Settlement Depository in Russia, focusing on aims, advantages, and unique structures in the financial infrastructure. Learn about the services, capitalization, risks, and benefits brought by this new establishment.
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National Settlement Depository: National Settlement Depository: The New Element The New Element of Russian Financial Infrastructure of Russian Financial Infrastructure Sergey Sukhinin Deputy Chairman of the Board National Settlement Depository 9thRuble Forum April 2011, London 1
Integration of two different businesses Integration of two different businesses MICEX SH MICEX SH NDC NDC Member of the MICEX Group The biggest Russian non-banking credit organization Provider of settlements in all MICEX markets: for government and corporate securities, foreign exchange, derivatives and commodities Provider of settlements in OTC markets: DVP transactions of NDC depositors, REPO deals with the Bank of Russia, deposit and loan transactions of the Bank of Russia Authorized Settlement Center in Organized Securities Market nominated by the Bank of Russia Member of the MICEX Group The biggest Russian settlement depository servicing all types of securities Provider of DVP settlement services for both primary and secondary markets and FOP /DVP settlement for OTC trades Settlement depository of three Russian stock exchanges Depository with AA- rating issued by Thomas Murray 2
Building of Unique Structure Building of Unique Structure MICEX The National Depository Center (NDC): The biggest depository of Russia Settlement House (MICEX SH): The biggest non-banking credit institution of Russia National Settlement Depository National Settlement Depository (NSD) (NSD) NSD :The biggest securities depository functioning as non-banking credit organization officially registered on 03 November, 2010 3
Creation of National Settlement Depository: Creation of National Settlement Depository: Aims and Advantages Aims and Advantages Aims: To build a unique structure for the Russian market providing the whole range of services of a settlement depository and a non-banking credit organization To improve the quality of services, provided for operational reliability Advantages of the new structure: Increased capitalization to strengthened position in the market Reduced costs and risks for clients Full range of settlement services for securities and cash Accelerated and optimized settlement process Opportunity to introduce new services, including securities lending and collateral management More flexible and attractive tariff policy 4
NDCs customer base as of 01 January, 2011 NDC s customer base as of 01 January, 2011 Total 2008 customers Total 2008 customers Total 4508 accounts Total 4508 accounts Depositors 879 915 Custody accounts Banking cash accounts 1901 840 Issuers 2607 5
NSDs basic financials as of 01 January, 2011 NSD s basic financials as of 01 January, 2011 (in millions) (in millions) Total assets RUB 78 677 (USD 2 592) Monthly average total assets for 2010 RUB 113 893 (USD 3 753) Equity RUB 7 868 (USD 259) Net profit for the year RUB 1 032 (USD 34) Funds with the Bank of Russia and in correspondent accounts with prime foreign banks RUB 59 093 (USD 1 947) Daily average turnover through customers accounts RUB 693 613 (USD 22 952) Daily average turnover through correspondent account with the Bank of Russia RUB 672 115 (USD 22 145) Total value of securities held in securities accounts - RUB 7 718 000 (USD 215 515) Quantity of securities held in custody (in securities accounts) 2 016 182 items 6
International & Domestic Cooperation International & Domestic Cooperation National Association of Securities Market Participants www.naufor.org National Securities Market Association www.nfa.ru The Association of Eurasian Central Securities Depositories www.aecsd.com European Central Securities Depositories Association, www.ecsda.com Society for Worldwide Interbank Financial Telecommunication www.swift.com Russian National S.W.I.F.T. Members Association (ROSSWIFT) www.swift.ru Association of National Numbering Agencies www.anna-web.com 7
Features and benefits Features and benefits of cash settlements effected by NSD of cash settlements effected by NSD Liquidity ratio at 100%, no credit risks Advanced, fully automated technology used in payment processing Certified encryption mechanism protection Availability of alternative communication channels and all data backup Direct participation in Bank of Russia s RTGS system ( BESP ) Extended operational deadlines for RUB and foreign currency payments : RUB 20:30 USD 20:30 EUR 16:00 CHF 14:00 GBP 11:30 BYR 13:00 UAH 17:30 KZT 13:00 8
International cash settlements through International cash settlements through correspondent account with major foreign correspondent account with major foreign banks banks JPMorgan Chase Bank, New York, USA The Bank of New York Mellon, New York, USA HSBC Bank USA, N.A., New York, USA J.P. Morgan AG, Frankfurt am Main, Germany VTB Bank (Deutschland) AG, Frankfurt am Main, Germany JPMorgan Chase Bank, N.A., London, United Kingdom Euroclear Bank SA/NV, Brussels, Belgium Clearstream Banking S.A., Luxembourg, Luxembourg In PJSC CB Privatbank , Dnepropetrovsk, Ukraine National Bank of Kazakhstan, Almaty, Kazakhstan JSC Bank VTB (Belarus), Minsk, Belarus 9
Market trends and new challenges Market trends and new challenges New challenges MICEX expands its business to the CIS markets (Ukraine, ) Support to the newly creating IFC project in a global competition for international investors Thus we are to have the whole range of up-to-date services meeting domestic and global investors expectations External drivers Legislation on CSD to appear in the Russian Federation Russian legislation for on- exchange trading with foreign financial instruments has been approved ICSDs (Euroclear, Clearstream) and exchange groups (NYSE, Nasdaq, LSE) fight for a larger- scale business, new markets and acquire new infrastructural organizations in other countries New systems of cross-border trading have been launched: T2S, Link UP Markets 10
NSDs market position for 2014 NSD s market position for 2014 Moscow International Financial Center London 3 hours 6 hours Tokio Moscow Frankfurt 2 hours 5 hours Hong Kong CSDs and ICSDs CIS burses CIS CSDs Euroclear Clearstream PFTS International investment structures MICEX Stock Exchange National Mercantile Exchange RTS MICEX RSX SPICEX NCC National Settlement Depository Russia trading floors Russian OTC MICEX Group 11
NSD as a single entrance point for foreign NSD as a single entrance point for foreign investors: vision for 2014 investors: vision for 2014 Custody, Settlements, Securities Lending, Access to RTGS Intermediaries IPO/SPO, corporate actions, corporate information Issuers Lombard Loans, REPO, Collateral Management Bank of Russia CSD for the government debt market Ministry of Finance Custody, Interbank, Forex, Precious metals Commercial banks Settlements on the basis of clearing MICEX SPICEX RTS PFTS OTC Russia Transaction Settlements, Pre-matching settlements Abroad New clients Foreign intermediaries (CSDs, ICSDs) Custody, Cross-border settlements 12
Detailed roadmap of NSD strategy realization Detailed roadmap of NSD strategy realization Range of services Range of services complies to the best complies to the best CSD practice CSD practice Leading settlement Leading settlement depository in the CIS depository in the CIS NSD NSD integration integration completion completion CSD of the Russian CSD of the Russian Federation Federation New IT-systems: Alameda and ASER Development of DVP 1 DVP 3 on the OTC market Securities lending agent Settlements through BESP Mature EDI system with registrars Collateral management FundSettle system Preliminary matching PVP Single corporate information center Settlements of trades with precious metals Business continuity system. Backup center, backup office Eligible depository according to 17f-7 (SEC 1940 Act) Correspondent network in all the CIS countries IPO for CIS issuers Derivatives: accounting and settlements Mortgage transactions: safekeeping, accounting and settlements Provision of services on 24 7 basis Loans secured by portfolio of financial instruments Total assets on deposit : - RUB 30 tn Foreign securities RUB 6 tn Safekeeping of all Russian securities owned by foreign investors: NSD share not less than 30 40% Safekeeping of the major part of foreign securities owned by Russian investors (60 70%) Integration into basic European and global settlement systems Correspondent relations with the leading CSDs and ICSDs 2011 2012 2013 2014 13
Contacts Contacts Client Services Division : Tel.: +7 (495) 956 2790 (91) E-mail: dc@ndc.ru, marketing@ndc.ru Client Relations Development Department : Tel.: +7 (495) 234 9960 Public Affairs Department : Tel.: +7 (495) 232 0910 E-mail: pr@ndc.ru Web-sites: www.ndc.ru, www.isin.ru, www.micex.ru/group/settlementhouse/portrait Address: 13, bldg. 1, Mashkova St., Moscow, 105062, Russia
