NSD retains positive CSD rating
24 March 2016 Moscow
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National Settlement Depository (NSD) has retained the central securities depository (CSD) rating of AA- from Thomas Murray Data Services.
The Russian CSD rating reflects ‘very low overall risk’ with a stable outlook. The stable outlook took in to account some new developments planned for 2016, however these are not expected to affect the CSD’s overall rating.
NSD scored AA- for asset commitment, counterparty risk, asset safety, asset servicing, operational risk and governance and transparency risk. It scored a slightly lower rating of A+ for liquidity risk, but achieved its highest rating of AA for financial risk.
The asset servicing risk rating was improved to ‘positive’ because of the NSD’s corporate actions reform, which has led to automation of corporate actions processing and centralising of corporate actions information.
Nick Bradley, chief risk and ratings officer of Thomas Murray Data Services, said: “Thomas Murray Data Services notes that NSD has implemented a number of initiatives and has addressed some of the weaknesses identified in our previous ratings’ analyses. Thomas Murray will be monitoring how changes in the world economy and other external and internal factors have an impact on the capital markets in Russia.”
Eddie Astanin, chair of the executive board of NSD, said: “NSD performs the functions of central securities depository in the Russian market and at the same time is a globally integrated company that interacts with key players of the banking sector and the global settlement infrastructure. This status requires special attention to risk management as it is critically important to comply with international standards.”
“We are trying to maintain high standards and use the international expertise for our audit. NSD has taken measures to significantly improve risk mitigation in the Russian market.”
CSD ratings are designed to assess risk exposures for investors with regards to the processes CSDs have in place to ensure safekeeping and clearing and settlement of securities. They also assess the depository’s willingness and ability to protect participants and clients from losses.
The NSD rating due diligence took place between 30 November and 3 December 2015.
The Russian CSD rating reflects ‘very low overall risk’ with a stable outlook. The stable outlook took in to account some new developments planned for 2016, however these are not expected to affect the CSD’s overall rating.
NSD scored AA- for asset commitment, counterparty risk, asset safety, asset servicing, operational risk and governance and transparency risk. It scored a slightly lower rating of A+ for liquidity risk, but achieved its highest rating of AA for financial risk.
The asset servicing risk rating was improved to ‘positive’ because of the NSD’s corporate actions reform, which has led to automation of corporate actions processing and centralising of corporate actions information.
Nick Bradley, chief risk and ratings officer of Thomas Murray Data Services, said: “Thomas Murray Data Services notes that NSD has implemented a number of initiatives and has addressed some of the weaknesses identified in our previous ratings’ analyses. Thomas Murray will be monitoring how changes in the world economy and other external and internal factors have an impact on the capital markets in Russia.”
Eddie Astanin, chair of the executive board of NSD, said: “NSD performs the functions of central securities depository in the Russian market and at the same time is a globally integrated company that interacts with key players of the banking sector and the global settlement infrastructure. This status requires special attention to risk management as it is critically important to comply with international standards.”
“We are trying to maintain high standards and use the international expertise for our audit. NSD has taken measures to significantly improve risk mitigation in the Russian market.”
CSD ratings are designed to assess risk exposures for investors with regards to the processes CSDs have in place to ensure safekeeping and clearing and settlement of securities. They also assess the depository’s willingness and ability to protect participants and clients from losses.
The NSD rating due diligence took place between 30 November and 3 December 2015.
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