In 2014, Moscow Exchange launched a major initiative to segregate clearing and trading participants. As a part of this process, a new “general clearing firm” category was created with higher capital requirements. This is in line with best practice in developed markets, highly capitalised market participants accept the clearing and settlement risks of smaller players. This the overall risk of centralised settlement systems. Companies with ‘general clearing firm’ status are eligible to provide clearing services to other categories of FX Market customers, both Russian and foreign legal entities. Market participants operating via general clearing firms will be able to reduce costs of trading on the FX market.

Moscow Exchange continued to develop its FX offering in 2014. On 1 December, it started trading in GBP and HKD in TOM and TOD instruments, and overnight swaps without full pre-funding, with settlement in RUB. Trading in the currency pair BYR/RUB was facilitated as the requirement of the full pre-funding was removed, new were instruments offered — namely with TOM settlement and overnight swaps — and trading hours were extended.
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In 2014, Moscow Exchange’s Money Market continued to expand the types of securities admitted for repo. The Exchange also introduced settlement in USD and EUR for interdealer repo in Eurobonds, foreign stocks and depositary receipts (DRs). From June to December, the volume of interdealer repo transactions in those securities was RUB 7 trln, or 21% of the total volume of the total interdealer repo volume.

Major changes were made to the regime for repo with the central counterparty (CCP), the fastest growing Money Market instrument. Trading hours were extended, early settlement was introduced and the first Eurobonds were introduced for repo with the CCP.
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In 2014, a number of new products were introduced on the Moscow Exchange Derivatives Market. September saw the launch of deliverable futures contracts on shares of Russia’s largest retailer Magnit and on shares of Moscow Exchange, as well as the launch of futures contracts on Russian sovereign Eurobonds with 2030 maturity. With the highly liquid sovereign Eurobond market offering ample potential, brokers were thus given additional opportunities to manage their portfolios.

The Exchange also began offering futures on Russian market volatility. The contract’s underlying asset is the Russian market volatility index (RVI), the method of calculation of which has been updated to meet current international standards. The RVI enables investors to predict market expectations and respond quickly to events, including of a macroeconomic nature. The new product helps hedge securities portfolios and positions in the RTS Index and MICEX Index futures, as well as create arbitrage strategies.

In October the Exchange began accepting as collateral for derivatives trades — along and securities. The addition of allows domestic and international brokers to apply varying approaches to collateral management and to minimise the funding costs associated with their own and clients’ operations.
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In 2014, in cooperation with the regulator, Moscow Exchange pushed ahead with simplifying the debt issuance process and expanding opportunities for issuers to raise debt capital on the domestic market. In particular, companies can now register bond programmes, which allows placement of bonds within the programme limits with no further registration, thus reducing issuers’ timelines and administrative expenses.

In June, the Exchange introduced an intraday clearing session to allow settlement in the middle of the trading day in order to accelerate delivery to end-customers. As such, there are now two clearing sessions on the Equity & Bond Market.

In late 2014, the Exchange expanded its information service offering by launching the MOEX Board indicative quotation system. The system operates like a notice board, allowing traders and investors to enter and view quotes for more than 1 020 stocks that are not traded on the Russian regulated market.
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Following its launch in 2013, the Precious Metals Market operated at full force for the first year in 2014. The market facilitates trading in gold and silver. Trading takes place on the same platform as the FX Market and utilises the same risk management system. RUB, USD, EUR, CNY, gold and silver are accepted as collateral. The NCC Clearing Bank acts as both the central counterparty and clearing house.

In 2014, the Precious Metals Market welcomed 25 new members, including the largest Russian market participants. Seven market-maker agreements were signed with market participants. Four non-bank organisations began offering direct market access (DMA) to their clients. At the start of 2015 there were 48 market participants on the Precious Metals Market, consisting of 39 banks and nine investment companies.
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