Russia Boosts Capital Markets

Terry Flanagan

The Moscow bourse is rapidly building the infrastructure to enable trading of all asset classes and Russian securities.

FORTS, the futures and options market of the Moscow Exchange, is a leading trading venue for derivatives in Russia and Eastern Europe. Derivatives traded on FORTS include the RTS Index, MICEX Index, Russian Volatility Index, sector indices, shares and bonds of Russian issuers, and Russian Federation government bonds.

“The RTS Index is one of the mort traded index futures in the world with between two and three billion dollars in average daily volume,” said Roman Sulzhyk, managing director and head of the Moscow Exchange’s Futures & Options Market. “Through the use of derivatives, it’s now possible to take large positions in Russian securities.”

Open Joint Stock Company “Moscow Exchange MICEX-RTS” (Moscow Exchange) acts as an organizer of trading on FORTS. Clearing is performed by Joint-stock company “RTS Clearing Center” specializing in clearing services on the derivatives market.

“Previously, the only way to move capital in and out of Russia was through major financial institutions,” said Sulzhyk. “Now, anyone can clear through us through second or third tier banks, and this and this will energize the business of transferring risk through the international community.”

The National Clearing Centre (NCC) has been designated Russia’s first qualified central counterparty (CCP). The NCC’s attainment of qualified CCP status provides additional guarantees of Russia’s exchange infrastructure to local and foreign clients.

National Settlement Depository (NSD), the central securities depository of the Russian Federation and a part of the Moscow Exchange Group, has completed a mass transfer of assets from registers to the central securities depository (CSD) for safekeeping. The completion of assets’ transfer to CSD’s accounts is intended to support forthcoming placements of securities of privatized Russian companies on Moscow Exchange.

As of July 2013, the value of securities in depository accounts opened with NSD stood at RUB17.638 trillion, an increase of 46.4% YTD.

“One of the goals is to link the CCP and the CSD so that all OTC transactions can get cleared at the same time,” said Sulzhhyk.

Nasdaq OMX and Moscow Exchange (MOEX) have agreed to work jointly to develop the Russian technology and biotechnology community. The aim of the co-operation is to jointly facilitate access to capital for the fast growing Russian start-up community and to promote listings at both exchanges.

“There are a lot of interesting technology companies emerging from Russia, in combination with a strong interest from global issuers and investors to become more involved with this community,” said Bruce Aust, executive vice president and head of global listings at Nasdaq OMX. “We have supported some of the new, leading and fast growing Russian technology companies in raising capital, like CTC Media, QIWI and Yandex, who we are proud to have listed with us. We truly look forward to being a part of the new Russian technology companies development and support them with the best possible foundation to raise capital in Russia and globally.”

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