Russia’s NSD awarded AA- rating
20 January 2015 Moscow
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Russia’s National Settlement Depository (NSD) has retained its central securities depository rating of AA- with a stable outlook, following assessment by Thomas Murray Data Services.
The rating translates as a ‘very low risk’ exposure profile and represents a weighted average of eight components.
In governance and transparency, the rating was upgraded from A+ to AA-, as a result of changes to the board of directors. This included a shift to one third of board members being independent directors, while an additional customer committee was created for discussions on corporate actions development.
Elsewhere, asset commitment, counterparty risk, asset safety, asset servicing, and operational risk all scored AA-, while financial risk scored AA and liquidity risk reached A+.
During the 2014 review, the NSD also introduced an additional batch for on-exchange settlements, and introduced a collateral management system for repo trades with the central bank, in a bid to improve access to liquidity and reduce counterparty risk.
It also started to provide information from shareholder meetings, collecting information and passing it on to clients and investors.
Participant feedback suggested that the NSD is particularly client-oriented.
Central securities depository (CSD) rating are designed to asses the risk exposures for investors by assessing the processes that a CSD has in place to facilitate the safekeeping of clearing and settlement securities. It takes in to account the capabilities of the depository and the quality and effectiveness of its operational infrastructure, as well as its willingness and ability to protect clients from losses, and the scope and quality of its services.
Simon Thomas, CEO and chief ratings officer of Thomas Murray Data Services, said: “Thomas Murray Data Services is delighted to be able to continue supporting NSD through our public risk rating programme.”
“The transformation in the Russian securities market over the past few years has been significant. We will be carefully watching to assess how the market infrastructure is affected by any external supranational factors. We look forward to continuing working with NSD as additional developments come to fruition.”
Eddie Astanin, chairman of the executive board of NSD, added: “NSD places special emphasis on operational reliability and risk management. These are two areas of focus for the supervisory board and for all the employees of NSD. It’s very important for NSD to be recognised on both national and international levels.”
“In 2014 NSD was recognised by the Bank of Russia as a systemically important infrastructure organisation of the financial market. NSD has made significant improvements in reducing risk in the Russian market and it is encouraging to see this reflected in the rating issued by Thomas Murray Data Services.”
“During several years the CSD of Russia has been upgrading its overall rating (from A+ to AA- in 2012) and separate rating components (asset servicing risk was upgraded in 2013, and governance and transparency risk in 2014). We look forward to continuing our work aimed at enhancing the risk management system of the Russian post-trading services market in 2015, taking into account the recommendations of Thomas Murray Data Services.”
The ratings due diligence took place between 6 and 10 October 2014, and information provided is accurate as of those dates.
The rating translates as a ‘very low risk’ exposure profile and represents a weighted average of eight components.
In governance and transparency, the rating was upgraded from A+ to AA-, as a result of changes to the board of directors. This included a shift to one third of board members being independent directors, while an additional customer committee was created for discussions on corporate actions development.
Elsewhere, asset commitment, counterparty risk, asset safety, asset servicing, and operational risk all scored AA-, while financial risk scored AA and liquidity risk reached A+.
During the 2014 review, the NSD also introduced an additional batch for on-exchange settlements, and introduced a collateral management system for repo trades with the central bank, in a bid to improve access to liquidity and reduce counterparty risk.
It also started to provide information from shareholder meetings, collecting information and passing it on to clients and investors.
Participant feedback suggested that the NSD is particularly client-oriented.
Central securities depository (CSD) rating are designed to asses the risk exposures for investors by assessing the processes that a CSD has in place to facilitate the safekeeping of clearing and settlement securities. It takes in to account the capabilities of the depository and the quality and effectiveness of its operational infrastructure, as well as its willingness and ability to protect clients from losses, and the scope and quality of its services.
Simon Thomas, CEO and chief ratings officer of Thomas Murray Data Services, said: “Thomas Murray Data Services is delighted to be able to continue supporting NSD through our public risk rating programme.”
“The transformation in the Russian securities market over the past few years has been significant. We will be carefully watching to assess how the market infrastructure is affected by any external supranational factors. We look forward to continuing working with NSD as additional developments come to fruition.”
Eddie Astanin, chairman of the executive board of NSD, added: “NSD places special emphasis on operational reliability and risk management. These are two areas of focus for the supervisory board and for all the employees of NSD. It’s very important for NSD to be recognised on both national and international levels.”
“In 2014 NSD was recognised by the Bank of Russia as a systemically important infrastructure organisation of the financial market. NSD has made significant improvements in reducing risk in the Russian market and it is encouraging to see this reflected in the rating issued by Thomas Murray Data Services.”
“During several years the CSD of Russia has been upgrading its overall rating (from A+ to AA- in 2012) and separate rating components (asset servicing risk was upgraded in 2013, and governance and transparency risk in 2014). We look forward to continuing our work aimed at enhancing the risk management system of the Russian post-trading services market in 2015, taking into account the recommendations of Thomas Murray Data Services.”
The ratings due diligence took place between 6 and 10 October 2014, and information provided is accurate as of those dates.
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