Transcript Document

New Market Realities:
Opportunities and Challenges
Nikolay Egorov
Director General, NDC
Member of AECSD
ACSDA Leadership Forum
October 6 – 9, 2009
Santiago, Chile
Agenda
• AECSD evolution
• NDC strategic development
Association Members
AECSD was established in 2001.
The Association incorporates 12 depositories from 10 CIS countries:
Central Depository of Armenia
The National Depository Center (Azerbaijan)
Republican Central Securities Depository (Republic of Belarus)
Georgian Central Securities Depository
National Securities Depository of Moldova
Central Securities Depository (Kazakhstan)
Central Depository (Kyrgyzstan)
State CSD of the Republic of Uzbekistan
Interregional Stock Union (Ukraine)
The National Depository of Ukraine
Depository Clearing Company (Russian Federation)
The National Depository Center (Russian Federation)
Objectives
• Harmonization of the regulatory framework
• Establishment of depository links among the members to support
cross-border securities transactions
• Standardization of the technologies for the depository operation,
procedures for depository transaction processing, and rules and
regulations governing the depositories' activities
• Adoption of international messaging standards for depository
transactions and their use in the national practice
• Development of Electronic Document Interchange
• Supporting a coordinated process to enable the Association
members to integrate into the global depository system
Governance Structure
General Meeting
of AECSD Members
Chairman
Working Groups
• Depository Links
• CSD Legal Issues
• Development of Electronic Messaging Standards
• Administration of the Association Website
Secretariat
NDC, Russia
Working Groups Activities
• Report “Correspondent accounts of non-residents in depositories
of the Association of Eurasian Central Securities Depositories”
(October 2008)
• Report “Clearing Activities in AECSD Member Countries”
(October 2008 )
• Corporate actions survey (October 2009)
International Activities of the
Association
• An observer status in ECSDA, AMEDA and ACG
• Participation in international conferences and forums (CSD10,
Annual Russian Securities Forum, SIBOS etc.)
• Organizing and holding seminars and trainings on depository and
clearing services for Association members
• Proposal on cross-membership of AECSD and ACSDA as
observers
VI International AECSD Conference
Tashkent, Republic of Uzbekistan
15-16 October, 2009
Main Agenda of the Conference:
• The role of depository in the issuer's corporate actions in AECSD
• Record-keeping of rights for securities: from depository to
custodian
• Regional markets during the crisis period: does the crisis generate
ideas or obstacles
Agenda
• AECSD evolution
• NDC strategic development
“The National Depository Center”
(Closed Joint Stock Company)
• Member of the MICEX Group
• The biggest Russian settlement
depository servicing all types of
securities
• NDC provides DVP settlement
services for both primary and
secondary markets and FOP /DVP
settlement for OTC trades
• Settlement depository of three
Russian stock exchanges
• AA- Thomas Murray rating
NDC performance highlights
for IH 2009
• Value of securities held in NDC:
RUB 4.7 trillion (+7.2%)
• Number of issues held: 2758
• Number of inventory operations:
1 164 366 (-8.1%)
• Turnover: RUB 26.7 trillion (-7%)
• Capital and retained earnings
(RAS) for IQ2009 vs IQ2008 :
RUB 1,85 bln. (+25%).
• Net Income (RAS) for IQ2009 vs
IQ2008: RUB102 mln. (-21,1%)
Strategic Direction: Effective Corporate
Governance Structure
• On August 10, 2009 NDC became a Closed Joint Stock Company
• MICEX SH and NDC – on the way to merge
Benefits for clients
• Providing a full range of
The National
Depository Center
(NDC)
MICEX
Settlement House
(MICEX SH)
MERGE
settlement services
• Raising capitalization to strong
the market position
• Improving perception of the
Russian financial infrastructure
globally
NDC as Efficient Location
for Domestic Settlement (1)
Government bonds
NDC – de-facto CSD
Corporate & Regional Bonds
NDC – de-facto CSD
• Trading only on MICEX
• Main Trading Mode – T+0, Negotiated
Deal Mode– T+0-T+2
• Payment agent – Bank of Russia
• All trades are settled on DVP basis
• Issued in dematerialised form with global
certificates
• Main Trading Mode T+0, DVP,
Negotiated Deal Mode T+0-T+30 DVP
basis
• NDC as a paying agent in 29% of all
transactions
Equities
No CSD
• Book-entry form
• Exchange trades (on MICEX, RTS) – same as bonds
• OTC: re-registration vs. settlement
depository/custodian
• Trade settled through registrar – T+3 – T+7 cycle
• Trade settled via settlement depository/custodian –
T+0
NDC as Efficient Location
for Domestic Settlement (2)
Speedy Settlement Scheme (SSS)
• NDC and ING Wholesale Banking project
• SSS - a temporary scheme, like NDC-DCC Bridge, will be
replaced by more sophisticated CSD settlement services
• STP
• Fixed fee
• Blue chips
• Non-exclusive scheme
SSS was created to allow faster settlements
and faster links with various markets
International Settlement Facilities
Correspondent accounts
• CSD the Republic of
Kazakhstan
• NDC of the Republic of
Azerbaijan
• CSD of the Republic of
Belarus
• Clearstream Banking
• Euroclear
New DVP service via Euroclear Bank
Сash
clearance
account
16420
link
Securitie
s
clearance
account
12065
Corporate Actions in Russia:
NDC’s Value Proposition
NDC statistics, 2007 - 1Q 2009
• 75% of documents handled
by NDC are related to CAs
• NDC is the biggest Russian
payment agent for the
issuers of corporate and
regional bonds
350
300
250
200
150
100
50
0
2007 1Q 2007 2Q 2007 3Q 2007 4Q 2008 1Q 2008 2Q 2008 3Q 2008 4Q 2009 1Q
Merger / pari passu (cancellation of additional issues)
Corporate actions (conversions, entitlements, exchange offers, redemptions, repurchases etc.)
* Excluding bonds of the Bank of Russia
• NDC acts as the Russian
National Numbering
Agency and is authorized by
FFMS of Russia to qualify
the foreign securities for
trading on the Russian
market
Alliance Lite: Service Aimed at Boosting
International Standards in Russia
NDC Participant
Internet (e-mail)
NDC security
LUCH files
LUCH
Internet (web)
NDC security
LUCH files
Web-access
Alliance Lite
(Operator entry)
Internet (web)
SWIFT security
SWIFT Community
Brokers/Investment Managers
Custody Banks
SWIFT files
LUCH files
File Act
(file exchange)
Back-office
The First Step to CCP and
Securities Lending
• CCP for MICEX SE market - new project aimed to implement risk
management system for fair market participants
• Securities lending as NDC service for CCP
Lender
Accepted orders
Borrower Central
Counterparty
Securities
available for
ASL trades
MICEX Stock
Exchange
Trading floor
Net - positions
NDC
Settlement
depository
Net – positions
MICEX
as a
Clearing system
Instructions
Contact Information
• AECSD Secretary
The National Depository Center
13, bldg 1, Mashkova St., Moscow,105062, Russia
Tel.: +7 (495) 232-0513
E-mail: [email protected]
• AECSD Website: www.aecsd.com
Thank you for attention!