Euroclear Bank has been granted access to Russia’s central securities depository (CSD) to offer post-trade services for one of the most actively traded classes of Russian government bonds, Russian OFZs.
The firm will also offer services for other Russian government and municipal bonds, corporate bonds and securities issued by foreign entities.
Greater international participation is expected in the Russian markets as the country’s two major exchanges – MICEX and RTS – have recently merged to become the Moscow Exchange.
Euroclear’s ability to offer services in Russia was dependant upon Russian public authority approval of National Settlement Depository (NSD) as Russia’s official central securities depository, and related regulatory procedures.
“The bilateral NSD/Euroclear Bank link aims to provide the highest level of asset protection for clients using the service. OFZ and other Russian fixed-income trades will be able to settle with Euroclear Bank; settlement risk should decline as settlement finality will be based solely on the National Settlement Depository’s records,” said Frederic Hannequart, chairman of Euroclear Bank. “Working directly with NSD is the best way forward to achieve the levels of efficiency, effectiveness and operational risk control that our clients expect.”
Euroclear plans to offer cross-border transaction processing, asset servicing and collateral management.
“Client abilities to conduct cross-border transactions in accounts opened with our organisations means increased transparency and, as a consequence, improved attractiveness of the Russian market for global investors. We expect this step will have a positive impact on exchange activities of Russian issuers, where they will reach a greater pool of national and foreign investors,” said Eddie Astanin, CEO of Russia’s National Settlement Depository.
Upon launch of the link with NSD, Euroclear will have links with CSDs in 45 major countries.