Moscow Exchange renovates Russian security settlement
03 April 2013 Moscow
Image: Shutterstock
Moscow Exchange has begun the settlement of securities on the T+2 basis, one amongst many recent reforms which are hoping to make trading on Russia’s main exchange more attractive to both international and Russian market participants.
The renovation now means that trading members of the exchange require only partial collateral to execute trades, and full settlement and delivery of securities will take place two days after the trade date.
The move to T+2 for 1780 securities listed will be executed in stages. From March to June this year, settlement in T+2 will be available for the fifteen most liquid stocks and all issues of government bonds. They will also continue to be available on a T+0 basis.
Beginning 1 July, the exchange will extend the list of T+2 eligible securities, and settlement for these names in T+0 will end. From the beginning of 2014 all securities listed on the Moscow Exchange"s securities market will be settled on the T+2 basis.
"The system of pre-payment for trades played a positive role as the Russian securities market was getting off the ground” said Alexander Afanasiev, CEO of the Moscow Exchange.
“Trading in Russia is now integrated into the global financial markets and our issuers expect the latest in settlement and risk management tools. The globally recognised T+ settlement model lowers costs for market participants, increases efficiency of deployed capital and will lead to higher trading volumes. This system is already in place on Moscow Exchange's foreign exchange market; now has come the time for it to be implemented on the equities market."
The reform of the settlement cycle is part of a larger programme to upgrade Russia’s capital markets and ensure that Moscow is the primary platform for trading across Russian asset classes. Beginning with the merging of Russia’s two main exchanges, creating the Moscow Exchange, since then Russia has established a central securities depository, opened up the bond market to Euroclear and Clearstream, and created a central counterparty for clearing across all markets.
The renovation now means that trading members of the exchange require only partial collateral to execute trades, and full settlement and delivery of securities will take place two days after the trade date.
The move to T+2 for 1780 securities listed will be executed in stages. From March to June this year, settlement in T+2 will be available for the fifteen most liquid stocks and all issues of government bonds. They will also continue to be available on a T+0 basis.
Beginning 1 July, the exchange will extend the list of T+2 eligible securities, and settlement for these names in T+0 will end. From the beginning of 2014 all securities listed on the Moscow Exchange"s securities market will be settled on the T+2 basis.
"The system of pre-payment for trades played a positive role as the Russian securities market was getting off the ground” said Alexander Afanasiev, CEO of the Moscow Exchange.
“Trading in Russia is now integrated into the global financial markets and our issuers expect the latest in settlement and risk management tools. The globally recognised T+ settlement model lowers costs for market participants, increases efficiency of deployed capital and will lead to higher trading volumes. This system is already in place on Moscow Exchange's foreign exchange market; now has come the time for it to be implemented on the equities market."
The reform of the settlement cycle is part of a larger programme to upgrade Russia’s capital markets and ensure that Moscow is the primary platform for trading across Russian asset classes. Beginning with the merging of Russia’s two main exchanges, creating the Moscow Exchange, since then Russia has established a central securities depository, opened up the bond market to Euroclear and Clearstream, and created a central counterparty for clearing across all markets.
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