Access to Russian equities by international investors has been boosted this week by a number of initiatives launched by technology providers and trading venues.
Turquoise, the multilateral trading facility (MTF) majority owned by the London Stock Exchange (LSE), has confirmed that three primary market makers will now support trading across its full range of Russian derivatives.
VTB Capital is the first Russian bank to act as a market maker on Turquoise’s Russian derivatives service. French broker BNP Paribas will offer market making across all futures and Italy’s UniCredit, which joined the platform as a market maker in December last year, will continue to market make in both index and single stock options.
Turquoise Derivatives launched on 6 June, having integrated the LSE’s existing EDX derivatives market into the MTF’s operations in May. As with EDX, Turquoise Derivatives uses CC&G, the Italian clearing house acquired by the LSE with Borsa Italiana in 2007 for clearing services and technology, with LCH.Clearnet providing central counterparty services.
The LSE’s Russian service has seen average annual growth of 53% since its launch in December 2006 as part of EDX, with a 13% increase in notional value traded this year.
Turquoise Derivatives hosts dedicated market makers in depository receipt (DR) single stock futures and options, DR stock dividend futures, and FTSE and Russian international order book (RIOB) index futures and options. EDX went live with dividend futures based on RIOB underlyings in January.
“By trading through Turquoise Derivatives, Russian domestic and international counterparties are able to trade easily with one another on low-latency technology, with the benefit of a fully backed CCP.
We remain committed to building on our emerging markets product and will continue to bring new and innovative products to the platform,” said Adrian Farnham, CEO at Turquoise.
Risk checks
System supplier ARQA Technologies has launched the MICEXPreTrade module for its QUIK Broker system, to allow brokers providing direct market access for buy-side clients to MICEX, Russia’s largest equity market, to provide low-latency risk management checks.
The module connects directly to MICEX’s gateway software to confirm to the exchange that the transaction is permissible under pre-determined risk parameters. This allows the client to connect to MICEX directly with minimal delays to trading dependent on the user’s technical infrastructure.
Access to MICEX is restricted to local brokers as remote membership is not allowed, however overseas asset managers wishing to trade from London can use DMA services provided by Russian brokers based in London.
Data controls
Russia’s other major exchange, RTS, has announced it is to use services from fellow exchange group and technology provider Nasdaq OMX to ensure broker and end-user compliance with RTS’s market data policies.
The services include on- and off-site audits; post-audit services including review of administrative procedures; entitlement system and reporting methodologies; product and technical overviews; reconciliation activities; and employee training and consultation during the joint audit process.
These are intended to help RTS reduce the technical and administrative costs of market data distribution.
“We understand the importance of delivering secure and flexible solutions to our market data clients to help them achieve and maintain compliance,” stated Roman Goryunov, CEO, RTS Stock Exchange. “We are delighted with our new partnership with Nasdaq OMX, whose expertise and array of compliance services will place us in a unique position to provide superior market data services and preserve the value of our data offerings.”