Clearstream is launching its improved settlement solution and introducing municipal bonds via its direct link to the new Russian Central Securities Depository (CSD), the National Settlement Depository (NSD).
Clearstream has gone live with its new delivery versus payment (DVP) settlement solution – the market’s preferred settlement choice since it is more efficient, more secure and offers more real time settlement compared to the free of payment (FOP) option.
For DVP settlement, a clear link is established between a securities transfer system and a funds transfer system that ensures delivery occurs only as and when payment occurs.
This move by Clearstream is helping to pioneer a shift within the market from its current system of settling in cash batches, to a system which is closer to real-time settlement. The extent to which real-time securities settlement becomes a real possibility will still depend on the decision by Russian market participants to move away from the batch system for local cash transfers.
Clearstream has also introduced Russian municipal and regional bonds for settlement via the NSD and extends settlement deadlines for its free of payment (FOP) settlement service by several hours (from 13:55 to 17:20 CET summer time). These steps reflect good pace in Clearstream’s – and the wider market’s – settlement and custody services development since the establishment of the NSD as CSD for Russia at the end of last year. As a next milestone, Clearstream plans to introduce settlement for Russian corporate bonds and to enhance its access model for Russian equities as soon as local legislation allows for this.
Jeffrey Tessler, chief executive officer of Clearstream, says: “I am delighted we keep developing and enhancing our settlement and custody services in the Russian market. Our new delivery versus payment settlement solution is an exciting milestone as it helps pave the way for the Russian market to move more towards a real time settlement environment, keeping up with other capital markets around the world as part of Russia’s capital market reform.”
Eddie Astanin, chairman of the executive board, National Settlement Depository, says: “Switching to delivery versus payment (DVP) using the link between the National Settlement Depository and Clearstream will create additional opportunities for foreign investors who conduct transactions with Russian fixed income instruments. We are happy to see a high rate of technological development of Clearstream’s link, which in turn is contributing to the development of the national infrastructure and, as a consequence, makes the Russian financial market more attractive and competitive.”