Securities Financing Industry News | Foreign banks allowed to become direct clearing members of the Russian NCC

The Moscow Stock Exchange introduced a separate trading member and clearing member status for participants on the Russian execution platform and the central counterparty.

From today, foreign banks with clearing interests in the Russian market will be able to offer sponsored access to the National Clearing Center (NCC), the group’s CCP, allowing their clients to hold cash and collateral on the accounts of the foreign bank with NCC.

Under these changes, non-residents are allowed to achieve Individual Clearing Member (ICM) status, which allows them to trade on MOEX and independently clear and settle trades.

This will also allow non-residents to access the Deposit segment with money market CCPs, allowing them to manage cash positions in Russian rubles and foreign currencies.

Moscow Exchange Group, the parent company of NCC, says it will allow international clients trading on the Moscow Exchange to minimize credit risk and increase the volume of transactions on Russian assets supported on MOEX.

NCC Chief Executive Officer Eddie Astanin said: “These developments mean that NCC, as a qualified central counterparty, becomes a counterparty to the directors of non-resident transactions, ensuring the settlement of transactions. This service will reduce the risks of non-resident Clearing Members who, in turn, will increase their trading limits in the Russian market.

NCC will also act as a tax agent for transactions made on the MOEX by non-resident Clearing Members and their clients, processing withholding taxes and income tax on their behalf.

Speaking about this development, MOEX General Manager for Sales and Business Development, Igor Marich, said that international participants account for nearly 50% of the trading volume in the stock exchange and derivatives markets.

“Business development with international participants strengthens MOEX’s position as a pricing center for Russian assets and is part of our strategy. The ability for international financial institutions to become direct clearing members in all markets will allow them to expand their operations, ”said Marich.

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