Clearstream has opened up settlement to Russian corporate bonds its direct link to the Russian central securities depository, the National Settlement Depository (NSD).
In addition, Clearstream will work with its international central securities depository (ICSD) counterpart to ensure an effective linkage – known as the Bridge – between the two ICSDs.
The Bridge enables customers to easily settle transactions between accounts at the two ICSDs and will thus help increase liquidity flow in the Russian market.
The introduction of settlement for corporate Russian bonds, coupled with a firm commitment to establish the Bridge between the ICSDs in the Russian market, will help further develop the market infrastructure needed to offer investors and issuers an enhanced offering in the Russian capital market. The share of foreign investment in OFZ government bonds has gone up by circa 25 per cent, according to the Bank of Russia, since the establishment of new financial market infrastructure in Moscow.
As a next step, Clearstream will look to offer settlement for equities via its direct link to the NSD, due for summer 2014, in line with expected changes to Russian legislation. Meanwhile, Clearstream continues to settle equities in Russia via its indirect link to the NSD, through Clearstream’s local agent bank, Deutsche Bank Moscow.
Sergey Shvetsov, first deputy governor of the Bank of Russia and head of the Bank of Russia Financial Markets Service, says: “Access to the corporate bonds market granted to Clearstream is a great event for the Russian market. Entry of international clearing and settlement organisations to the OFZ market already provided a positive impact by decreasing the cost of borrowings for the government. Now we continue our commitment to open access to the stock market for ICSDs on the 1st of July 2014. We are considering Clearstream’s access to the corporate bonds market as an indicator of our successful work in collaboration with NSD and international infrastructural organisations.”
Jeffrey Tessler, chief executive officer, Clearstream, says: “We are delighted to have established and to keep further developing the necessary financial market infrastructure to help facilitate the opening up of the Russian capital market to foreign investors. Our new Russian corporate bond solution that went live today is a key milestone in this respect. In addition, we are working with our ICSD counterpart to ensure customers can settle accounts between the two ICSDs, which will help increase the liquidity flow in the market.”
Eddie Astanin, chairman of the executive board, National Settlement Depository, says: “We are pleased by Clearstream’s swift progress in helping to establish the financial market infrastructure, which underpins the further opening up of the Russian market. The established links between the NSD and leading international securities depositories is a positive sign of the progress made, both in legislation and infrastructure, of the Russian post-trading services market. There is still a long way to go. We have to improve accessibility of corporate actions information, develop new products like collateral management and serve investors from around the world in line with best practice. We believe that today’s launch is another big step in establishing Moscow as one of the global financial centres.”