Account structure. OTC and onexchange. settlement flows. Settlement

Transcription

1 Account structure. OTC and onexchange settlement flows Settlement

2 Nominee securities accounts structure according to the new Clearing Law Required by legislation Always should be opened but could have zero balance Used for OTC DVP in NSD with netting DVP1,2,3 (NSD code 19) Used for ON-exchange trading DVP is possible only without netting (DVP1 - NSD code 16) Client s main account Client s trading account opened for NSD Client s trading account opened for NCC Main sub-account Main sub-account Main sub-account* Code 38 blocked for corp. actions OTC DVP can be executed from main sub-account Or as an option Can be segregated by clients via sub accounts * Main sub-account should be opened by law requirements but it is not eligible for any type of operations Code 88 Securities for distribution among Clients Sub- account for Client 1 (70 code) Sub-account for Rus Broker 1 (code 31 for RUB) (code 3F for USD) Code IB Blocked for implementation of acts/orders of the state authorities Sub- account for Client 2 (70 code) Sub-account for Rus Broker 2 (code 36) 2

3 Trading account operated by NSD Trading account opened for NSD Main sub-account 1) Trading sub-accounts opening procedure initiated by Custodian 2) Clients of custodian can be segregated or not by sub-accounts 3) It s also allowed by NSD to segregate 1 or clients and not to segregate others 4) Transactions (including OTC FOP and DVP) to/from main sub-account are allowed Sub- account for Client 1 (70 code) OR Sub-account for Client 1 (assets of 1 client - 15 digits exist for codification of client Sub- account for Client 2 (70 code) Sub-account for Client Х (assets of all clients) 3

4 Trading account operated by NCC Trading account opened for NCC Main sub-account 1) Trading sub-accounts opening procedure initiated by Custodian 2) Trading sub-accounts have to be opened for each Russian Broker 3) Clients of every Russian brokers (foreign brokers) can be segregated or not by sub-accounts 4) It s also allowed by NSD to segregate 1 or several foreign brokers and not to segregate others (within position of every Russian broker. Please advise your clients to consult with their Russian brokers about options on their side) 5) All transactions to the main sub-account are blocked Sub-account for Rus Broker 1 (code 31 for RUB) (code 3F for USD) OR Sub-account for Rus Broker 1 (T+0 trading mode) (assets of 1 foreign broker - 5 digits exist for codification of client) Sub-account for Rus Broker 2 (code 36) Sub-account for Rus Broker 1 (T+0 trading mode) (assets of all foreign brokers clients operating through Broker 1 ) Sub-account for Rus Broker 2 (T+2 trading mode) (assets of all foreign brokers clients operating through Broker 2 ) 4

5 Securities account codification NSD securities account number consists of 12 digits: Account type Free digits-currently account opening date Account number within NSD current operational day Control digit 5

6 Securities sub-accounts codification NSD securities sub-account number consists of 17 digits; Codification of 31 sub-account (T0 trading mode): Sub-account code -31 Clearing participant code Clearing participant s client code Subaccount type Free digits Codification of 36 sub-account (T+2 trading mode): Sub-account code -36 Clearing participant code Clearing participant s client code Subaccount type 3-17 digits of 31 sub-account and corresponding 36 sub-account have to be the same. Free digits 6

7 Types of subaccounts 00 Main sub-account 0Y Blocked for OTC major stakes offers 01 Blocked as collateral 33 Blocked as collateral. Corporate securities 05 Blocked by the Bank of Russia 34 Blocked as collateral. Special sub-account МR Blocked as collaterals under the Bank of Russia's lombard loans Blocked as collaterals under the Bank of Russia's overnight loans Blocked under Securities Lending. Government securities market 38 Blocked for corporate actions 88 Securities for distribution among Clients 70 Main client's sub-account 10 Blocked due to seizure 74 Blocked to increase bank's capitalization IB ММ Z6 Z7 Blocked for implementation of acts/orders of the state authorities Blocked for trading. Government securities market Blocked for trades on securities collateral under the Bank of Russia s lombard loans Blocked for trades on securities collateral under the Bank of Russia's overnight loans 27 Blocked for settlements DR 73 Main sub-account (additional) 3A 3С IN Blocked for trading on SPCEX Stock sub-account Blocked for trading on SPCEX. Securities Lending with the Bank of Russia Long term safekeeping sub-account Securities submitted within the framework of the depository receipt program 29 Blocked for mutual settlements 81 Main sub-account. Without disposition of rights 31 3F Blocked for clearing in NCC. Settlements in Russian currency Blocked for clearing in NCC. Settlements in foreign currency RC RF Securities acting as a pledge for securities lending Blocked for clearing. FORTS 3Y Blocked for clearing in NCC. Major stakes offers RS Blocked for clearing. STANDARD 36 Blocked for clearing in NCC. Collateral 7

8 Securities settlement of on-exchange transactions Trading-clearing a/c (cash/ securities) Trading participant of ME (Russian broker) Trading participant of ME (Russian broker) Russia Foreign broker Trading National Clearing Centre Settlement National Settlement Depository Russian custodian securities acc. Russian custodian Client 1 Client Client N NCC Securities clearing acc. securities Upon instruction of NCC trading a/c for client 1(in the name of Russian custodian)* trading a/c for client (in the name of Russian Custodian)* Foreign custodian Trading accounts operated by NCC trading a/c for client N (in the name of Russian custodian)* * Trading sub-accounts have to be opened for each Russian Broker; Clients of every Russian brokers (foreign brokers) can be segregated or not by sub-accounts 8

9 Cash settlement options One cash account for T0 and T+2 settlement; Main cash account can be opened in the name of Russian bank, Russian broker, foreign institution; Trading cash account (30411) can be opened in the name of Russian broker, foreign institution; Clients of Russian bank can be segregated by separate cash accounts with NSD or not; Assets of Russian broker s clients have to be segregated from broker s assets. Clients of Russian broker can be segregated by separate cash accounts with NSD or not. 9

10 Cash settlement of on-exchange transactions Trading-clearing a/c (cash/ securities) Trading participant of ME (Russian broker) Trading participant of ME (Russian broker) Russia Foreign broker Trading National Clearing Centre Settlement Client 1 National Settlement Depository Foreign bank Russian bank/russian broker cash a/c Russian bank Client Client N trading cash a/c for client 1 NCC Securities clearing acc. cash Upon instruction of NCC trading cash a/c for client trading cash a/c for client N Foreign bank Trading accounts operated by NCC 10

11 T+2 settlement model (T+0 date)** 1 Client 1a* 1б National Clearing Centre National Settlement Depository Client trading cash acc. NCC Cash clearing account NCC Securities clearing account Client trading securities acc Instruction for crediting cash/securities as an initial margin. Cash can be credited to NCC cash clearing account directly* or via participant cash trading account. Securities should be credited on specific collateral sub-account on participants trading securities account Collateral can be credited up to the beginning of trading session or during the trading session under NCC approval 2. Check of initial collateral sufficiency made by NCC during the trading session Client s collateral securities sub-acc. * The option of direct crediting to NCC cash clearing account will be provided later ** T+2 deadlines and flows can be changed with regard to market participants requirements 11

12 T+2 settlement model (T+1 date)** Client 1 2a* 2б National Clearing Centre National Settlement Depository NCC Cash clearing account NCC Securities clearing account 4 Client trading cash acc. 3 1.Up to reports on morning clearing session results - margin call request. 2. Up to T+1 instructions on crediting cash (margin call) on NCC cash account with NSD directly* or via participant cash trading account. Securities should be credited on specific collateral sub-account on participants trading securities account. Collateral according to margin-call request have be credited under NCC approval. 2в Client trading securities acc. Client s collateral securities sub-acc. 3. Сheck of collateral sufficiency made by NCC during the trading session. * The option of direct crediting to NCC cash clearing account will be provided later ** T+2 deadlines and flows can be changed with regard to market participants requirements 12

13 T+2 settlement model (T+2 date)** National Clearing Centre Client 1a* 2б 1б 2а National Settlement Depository Client trading cash acc. NCC Cash clearing account NCC Securities clearing account Client trading securities acc. Client s collateral securities sub-acc Up to crediting cash for settlement, NCC approval required. Cash can be credited to NCC clearing account directly* or via participant cash trading account. 2. Up to crediting securities for settlement, NCC approval required. Securities should be credited to collateral sub-account of participant trading account. 3. Up to clearing procedure made by NCC settlement instruction. * The option of direct crediting to NCC cash clearing account will be provided later ** T+2 deadlines and flows can be changed with regard to market participants requirements 13

14 NSD OTC settlement models NSD OTC DVP without netting facilities (DVP1): instruction types 16/2, 16/3 (internal NSD settlement) NSD OTC DVP with netting facilities (DVP1, DVP2, DVP3 ): instruction types 19/1 (internal NSD settlement) instruction types 19/1 (external cash settlement- cash accounts with foreign banks) 14

15 OTC DVP settlement models (instruction types 16/2, 16/3) official service name - transfer of securities with the control of cash settlements DVP-1: Settlement against payment on real-time and DVP basis ensured by prefunding principle when the counterparties deposit securities and cash in advance to their cash and securities accounts respectively. Upon receipt of the DVP instruction securities and cash are withdrawn and delivered simultaneously. Therefore finality of trade is ensured upon settlement of the transaction in NSD Instruction types (sent via SWIFT): MT 540 / 542 or MT 541 / 543 Report types (sent via SWIFT): MT545, MT547 15

16 OTC DVP settlement models: DVP-1 settlement (instruction type 16/2) based on securities settlement instruction and payment instruction official service name - transfer of securities with the control of cash settlements (RUR, USD, EUR) 1. Securities settlement instruction MT542 National Settlement Depository 1. Securities settlement instruction MT Report MT547 Delivering party Receiving party 4. Report MT545 securities account securities account Delivering party 3. Matching confirmation MT548 cash DVP securities 3. Matching confirmation MT Statement MT900 Receiving party Debtor* 4. Statement MT103 Delivering party cash account Beneficiary cash account Receiving party cash account Beneficiary cash account 2. Payment instruction MT202 Trade -Cash account debited / credited during the internal DVP settlement can be opened not only for the delivering / receiving party but also for the third party acting as a debtor/beneficiary. Settlement deadlines : Real-time settlement mode within operational hours: from 9:30 to 20:00 MSK 16

17 OTC DVP settlement models: DVP-1 settlement (instruction type 16/3) based on the instruction formed by NSD according to the cash account agreement with customer official service name - transfer of securities with the control of cash settlements 1. Securities settlement instruction MT543 National Settlement Depository 1. Securities settlement instruction MT Report MT547 Delivering party securities account Receiving party securities account 3. Report MT545 Delivering party 2. Matching confirmation MT548 cash DVP securities 2. Matching confirmation MT548 Receiving party 3. Statement MT103 Delivering party cash account Receiving party cash account 3. Statement MT900 Trade Settlement based on the Unified instruction depositor-receiver of securities must provide depo order MF170 to NSD which must be marked in the settlement of the monetary assets Settlement deadlines : Real-time settlement mode within operational hours: from 9:30 to 20:00 MSK 17

18 OTC DVP settlement models: DVP-1/2/3 settlement scheme (instruction type 19/1) 1. Using Clients trading cash accounts opened with NSD (internal settlement) Client A bank account NSD clearing system 3 Aggregate clearing account (foreign currency) 2 3 Client B bank account Applicable SWIFT message types: MT541 for Seller of securities MT543 for Buyer of securities Settlement deadlines for DVP-1: Real-time settlement mode within an operational hours: Client A securities account Clearing account (securities) 3 3 Client B securities account from 9:30 to 19:30 MSK Settlement deadlines for DVP-2/3: Settlement conducted within clearing batches at: Client A 1 1 Client B 10:00, 12:00, 13:00, 15:00, 16:00, 18:00 and 19:40 MSK 1. Clients (participating in clearing) send DVP instructions to NSD and provide that there are sufficient fund deposited with their trading cash accounts opened with NSD 2. NSD executes netting of liabilities in pool of matched instructions. 3. NSD simultaneously settles funds and securities. 18

19 DVP-1/2/3 settlement scheme (instruction type 19/1) 2. Using Clients cash accounts with foreign banks (external cash settlement) Foreign bank 2 Client A account (client of Client A account) 5 J.P. Morgan & Co NY / Citibank, NY NSD Account 3 Foreign bank 1 Client B account (client of Client B account) Applicable SWIFT message types: MT541 for Seller of securities MT543 for Buyer of securities 6 Client A assets and liabilities account Client A securities account Clearing account 7 7 (securities) 4 NSD clearing system Aggregate clearing account (foreign currency) Client B assets and liabilities account Client B securities account Settlement deadlines for DVP-1: Real-time settlement mode within operational hours: from 9:30 to 19:30 MSK Settlement deadlines for DVP-2/3: Settlement conducted during clearing batches at: Client A 1 1 Client B 10:00, 13:00, 15:00, and 18:00 MSK 1. Clients (participating in clearing) send DVP instructions to NSD. 2. NSD executes netting of liabilities in pool of matched instructions. 3. NSD, on the ground of Client s Power of Attorney, transfers funds from Client B account, opened in foreign bank. 4. NSD reflects funds, received to its own account opened with foreign bank, on account of Client B. 5. NSD sends payment instruction from corresponding account opened with J.P. Morgan Chase / Citibank to transfer funds to seller s account. 6. NSD receives from foreign bank a confirmation that funds are received on seller s account in foreign bank. 7. NSD settles securities. 19

20 Disclaimer This presentation has been prepared and issued by NSD (the Company ). Unless otherwise stated, the Company is the source for all data contained in this document. Such data is provided as at the date of this document and is subject to change without notice. This document does not constitute or form part of, and should not be construed as, an offer or invitation for the sale or subscription of, or a solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any offer, contract, commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. The information in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information or opinions contained herein. None of the Company, or any of its subsidiaries or affiliates or any of such person's directors, officers or employees, advisers or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising, directly or indirectly, from the use of this document or otherwise arising in connection therewith. This presentation includes forward-looking statements. All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, achievements or industry results to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future. Important factors that could cause our actual results, performance, achievements or industry results to differ materially from those in the forward-looking statements include, among other factors: perception of market services offered by the Company and its subsidiaries; volatility (a) of the Russian economy and the securities market and (b) sectors with a high level of competition that the Company and its subsidiaries operate; changes in (a) domestic and international legislation and tax regulation and (b) state policies related to financial markets and securities markets; competition increase from new players on the Russian market; the ability to keep pace with rapid changes in science and technology environment, including the ability to use advanced features that are popular with the Company's and its subsidiaries' customers; the ability to maintain continuity of the process of introduction of new competitive products and services, while keeping the competitiveness; the ability to attract new customers on the domestic market and in foreign jurisdictions; the ability to increase the offer of products in foreign jurisdictions. Forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation as a result of any change in our expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. 20