Russia’s corporate actions reform in full swing
05 July 2016 Moscow
Image: Shutterstock
The legal framework for Russia’s corporate actions reform has come into force, cementing the National Settlement Depository (NSD), Russia’s central securities depository (CSD) as a corporate actions centre and single source of information on corporate actions.
The corporate actions reform has included introducing a new approach to drawing up lists of securities holders and new procedures for exercising security-holders rights in corporate actions, through introducing a centralised safekeeping system.
It has also introduced e-proxy voting through the CSD, and online e-voting, as new methods of participating in corporate actions.
The new law names NSD as the single source of verified corporate actions information – a move intended to counter data multiplicity and inconsistency. This should also improve efficiency for securities market participants, as they will not have to verify data from multiple sources.
As a corporate actions centre, NSD will offer stakeholders access to more reliable financial market infrastructure for processing corporate actions, and will serve as an information interchange on standards for corporate actions.
It will also allow clients to switch to using the electronic data interchange, without the use of hard copy documents.
NSD has launched NSDirect, a platform for market participants to form and send electronic documents when processing corporate actions. The interface allows data to be exchanged more quickly, and is protected by cryptography and data encryption.
Russia’s corporate actions reform is intended to improve the investment climate in Russia, while improving the rights and legal interests of investors, and increasing shareholder involvement in corporate governance.
Through improving the quality of corporate governance, the attractiveness of Russian assets could be improved, which would, in theory, introduce new opportunities for Russian companies to raise capital.
The corporate actions reform has included introducing a new approach to drawing up lists of securities holders and new procedures for exercising security-holders rights in corporate actions, through introducing a centralised safekeeping system.
It has also introduced e-proxy voting through the CSD, and online e-voting, as new methods of participating in corporate actions.
The new law names NSD as the single source of verified corporate actions information – a move intended to counter data multiplicity and inconsistency. This should also improve efficiency for securities market participants, as they will not have to verify data from multiple sources.
As a corporate actions centre, NSD will offer stakeholders access to more reliable financial market infrastructure for processing corporate actions, and will serve as an information interchange on standards for corporate actions.
It will also allow clients to switch to using the electronic data interchange, without the use of hard copy documents.
NSD has launched NSDirect, a platform for market participants to form and send electronic documents when processing corporate actions. The interface allows data to be exchanged more quickly, and is protected by cryptography and data encryption.
Russia’s corporate actions reform is intended to improve the investment climate in Russia, while improving the rights and legal interests of investors, and increasing shareholder involvement in corporate governance.
Through improving the quality of corporate governance, the attractiveness of Russian assets could be improved, which would, in theory, introduce new opportunities for Russian companies to raise capital.
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