Rapidly changing market
28 Oct 2020
NSD provides an update on the current challenges and opportunities within the asset servicing space
Image: romolo_tavani/adobe.stock.com
Russia is very mobile, and our models, including regulatory ones, are rapidly developing using the experience of developed markets.
The development we see is evidenced by the reform of corporate actions, when we dynamically changed the laws with the support of the regulator and introduced the appropriate automated technologies, as a result, a chain of information exchange was built from the issuer to the final investor.
The reform includes the topic of e-voting, simplified disclosure of information about owners, and avoidance of double taxation.
The exercise of owners ‘ rights to Russian securities, especially for foreigners, has always been a painful process.
Now a lot of that has become a thing of the past and, accordingly, has led to lower costs, financial losses from the possibility or impossibility of participating in corporate actions.
There has also been an increase in the volume of foreign securities. We have always sought to expand our expansion into foreign markets.
Now our investors are actively using NSD’s opportunities to integrate into global markets.
The COVID-19 pandemic has affected the economy of all countries but as Russian infrastructure, we do not observe a critical influence.
We see investors’ worries, but they have now reached a level similar to the beginning of the year.
For example, in August 2020, the share of non-residents, calculated as the share of a coupon-bearing federal loan bond issued by the Russian government (OFZ), on the accounts of foreign nominee holders was 28.52 percent (current nominal value) and 28.26 percent (initial nominal value).
As of 31 December 2019, the share of non-residents in the current nominal value was 31.5 percent, and in the initial one, 31.21 percent. The figures represent a small difference.
We see the growing demand for services that help reduce costs while ensuring cybersecurity and being technologically advanced are at the forefront. We see the demand from the market for the expansion of serviced assets (for example, structured bonds) and the demand for reliable market information.
As a critical element of the market infrastructure, NSD has been involved in a number of large-scale projects that required setting new standards and launching new platforms.
Along the way, NSD has gained unique expertise that we can now offer not only in the securities market but also beyond.
Today, our expertise is much needed in such regulator’s projects as the pension industry reform and the launch of the marketplace as part of which NSD is planning to act as Registrar of Financial Transactions (RoFT). The market is rapidly changing and in the future, some players will leave the market.
Service and product providers and end consumers will stay and, infrastructure with all its competences such as capability to handle big data, data protection, cybersecurity, high system performance, and operational interaction with the regulator will also remain in place as a key element.
You recently onboarded AIX CSD, giving them access to clearing and settlement services in the Russian market, what opportunities has this provided?
We provided the Astana International Exchange (AIX) Central Securities Depository (CSD) and its clients with a reliable and technological infrastructure for working in the Russian securities market.
Direct depository links mean simplified market access for investors, convenience, and, no doubt, risk and cost reduction for all parties.
In that respect, we fully live up to our mission as the infrastructure and the foreign nominee holder concept itself came around at the same time when the CSD was established, and we believe offering that opportunity to more clients is our crucial mission.
Elsewhere, Raiffeisenbank and Slavneft have initiated cooperation through your Transit 2.0 platform. Could you please explain a bit more about the NSD Transit 2.0 platform?
Transit 2.0, one of our major projects, has evolved from the existing service designed to enable securities market participants to communicate via NSD’s electronic data interchange system, but now offers a new, wider functionality.
Thanks to Transit 2.0, banks and their clients, large corporations, may use common messaging formats to communicate with each other, which contributes to cost reduction and greater convenience.
Moving forward, we seek to integrate Transit 2.0 with the SWIFT Service Bureau and the Bank of Russia’s Financial Messaging System, so that different participants could use a single, user-friendly interface to communicate via different channels, thus reducing their operating costs and risks.
At the moment, our partners include a variety of banks and corporations, such as Raiffeisenbank, Slavneft, Sberbank, and Gazprombank, and the list is growing.
The development we see is evidenced by the reform of corporate actions, when we dynamically changed the laws with the support of the regulator and introduced the appropriate automated technologies, as a result, a chain of information exchange was built from the issuer to the final investor.
The reform includes the topic of e-voting, simplified disclosure of information about owners, and avoidance of double taxation.
The exercise of owners ‘ rights to Russian securities, especially for foreigners, has always been a painful process.
Now a lot of that has become a thing of the past and, accordingly, has led to lower costs, financial losses from the possibility or impossibility of participating in corporate actions.
There has also been an increase in the volume of foreign securities. We have always sought to expand our expansion into foreign markets.
Now our investors are actively using NSD’s opportunities to integrate into global markets.
The COVID-19 pandemic has affected the economy of all countries but as Russian infrastructure, we do not observe a critical influence.
We see investors’ worries, but they have now reached a level similar to the beginning of the year.
For example, in August 2020, the share of non-residents, calculated as the share of a coupon-bearing federal loan bond issued by the Russian government (OFZ), on the accounts of foreign nominee holders was 28.52 percent (current nominal value) and 28.26 percent (initial nominal value).
As of 31 December 2019, the share of non-residents in the current nominal value was 31.5 percent, and in the initial one, 31.21 percent. The figures represent a small difference.
We see the growing demand for services that help reduce costs while ensuring cybersecurity and being technologically advanced are at the forefront. We see the demand from the market for the expansion of serviced assets (for example, structured bonds) and the demand for reliable market information.
As a critical element of the market infrastructure, NSD has been involved in a number of large-scale projects that required setting new standards and launching new platforms.
Along the way, NSD has gained unique expertise that we can now offer not only in the securities market but also beyond.
Today, our expertise is much needed in such regulator’s projects as the pension industry reform and the launch of the marketplace as part of which NSD is planning to act as Registrar of Financial Transactions (RoFT). The market is rapidly changing and in the future, some players will leave the market.
Service and product providers and end consumers will stay and, infrastructure with all its competences such as capability to handle big data, data protection, cybersecurity, high system performance, and operational interaction with the regulator will also remain in place as a key element.
You recently onboarded AIX CSD, giving them access to clearing and settlement services in the Russian market, what opportunities has this provided?
We provided the Astana International Exchange (AIX) Central Securities Depository (CSD) and its clients with a reliable and technological infrastructure for working in the Russian securities market.
Direct depository links mean simplified market access for investors, convenience, and, no doubt, risk and cost reduction for all parties.
In that respect, we fully live up to our mission as the infrastructure and the foreign nominee holder concept itself came around at the same time when the CSD was established, and we believe offering that opportunity to more clients is our crucial mission.
Elsewhere, Raiffeisenbank and Slavneft have initiated cooperation through your Transit 2.0 platform. Could you please explain a bit more about the NSD Transit 2.0 platform?
Transit 2.0, one of our major projects, has evolved from the existing service designed to enable securities market participants to communicate via NSD’s electronic data interchange system, but now offers a new, wider functionality.
Thanks to Transit 2.0, banks and their clients, large corporations, may use common messaging formats to communicate with each other, which contributes to cost reduction and greater convenience.
Moving forward, we seek to integrate Transit 2.0 with the SWIFT Service Bureau and the Bank of Russia’s Financial Messaging System, so that different participants could use a single, user-friendly interface to communicate via different channels, thus reducing their operating costs and risks.
At the moment, our partners include a variety of banks and corporations, such as Raiffeisenbank, Slavneft, Sberbank, and Gazprombank, and the list is growing.
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