Russian exchange operator RTS is planning to launch RTS Standard, an anonymous, displayed order book for trading cash equities, which supports short-selling and offers central counterparty (CCP) clearing. RTS says the platform, which will be launched in the near future, is based on global standards for exchange trading, and is a response to current trading trends in the Russian cash equities market.
The new platform will initially trade Russia’s nine most liquid stocks and RTS plans to extend the list to 15. Trading hours will be from 10.30 to 23.50 Moscow time to allow trading on RTS Standard to coincide with other major global exchanges. The platform will use the trading system underpinning FORTS, RTS’s derivatives market.
The system allows direct market access (DMA) and is connected to various DMA/order management systems via an API. FIX connectivity is also available; RTS implemented a new FIX gateway in 2008.
The new platform will also support short-selling and hedging. Users will not need to deposit 100% of the cash or stock in advance of the trade, and there is no obligation to own the assets on the day of trading.
CCP clearing on the platform will be provided by the RTS Clearing House, which currently acts as the CCP for FORTS. Settlement will take place four days after trade date (T+4). The system offers netting of obligations on positions with coinciding settlement dates.
Clearing members on FORTS will not need to put up a separate pot of collateral to trade and clear on RTS Standard – the exchange will allow users to have a consolidated cash position across its cash equities and derivatives markets. The exchange claims this will reduce clearing members’ funding costs and result in higher trading volumes.
The new trading platform is part of the Russian government’s plans to establish Moscow as a global financial centre. “RTS Standard will facilitate building up the liquidity of the Russian securities market, curb counterparties’ risks and boost development of the infrastructure,” the exchange said in a statement. “In addition, the new trading venue aims to attract foreign investor interest to the local equity market.”
Membership of RTS Standard is open to FORTS general clearing members and special clearing members, as well as other RTS trading members on payment of membership and contingency fund fees.
The nine stocks that will trade on RTS Standard from launch will be Gazprom, MMC Norilsk Nickel, LUKOIL, MTS, Rosneft, Sberbank, Surgutneftegas, Uralsvyazinform and JSC VTB Bank.