In 2014, the Bank of Russia assigned the National Settlement Depository (NSD) and Bank National Clearing Centre (NCC Clearing Bank) the status of systemically important financial market infrastructure institutions. The NSD was assigned the status of a systemically important central depository, systemically important settlement depository and systemically important repository. NCC Clearing Bank was assigned the status of a systemically important central counterparty. This recognition highlights the reliability and financial strength of Moscow Exchange Group companies.
Implementation of segregated accounts and the option of transferring client obligations and collateral to other market participants was a key strategic initiative aimed at strengthening protections for traders and their clients against risks associated with default of one or more firms.
Furthermore, a cross default arrangement was introduced across markets, providing for the use of the defaulter’s individual and collective clearing and other collateral from any market.
The Exchange will continue to implement clearing integration across the markets and improve risk management and clearing services.
The trade repository the process of recording OTC derivatives trades and adjusted its activities to match new legislation that took effect in June 2014. Some 1 130 market participants connected to the repository, and more than 138 000 reports on master agreements and transactions were registered. Customers actively reported not only mandatory repo transactions and FX swaps, but also optional FX, equity and bond forwards, commodity and interest rate swaps, and FX options. The repository will continue to adjust its activities to meet derivatives reporting standards taking effect in 2015.
In addition, collateral management services will be expanded in 2015. Participants of the standardised OTC derivatives market will be allowed to post securities as collateral. A delivery-versus-payment mechanism will be used via the Bank of Russia’s real-time gross settlement system (BESP system). Electronic matching services will be developed to offer securities lending from Euroclear and Clearstream to the Exchange’s customers.