Clearstream has opened up settlement to Russian corporate bonds via its direct link to the National Settlement Depository (NSD).
The international central securities depository has offered services in the Russian market since 2006, including government bonds (OFZ) since January 2012 via its indirect link to the Russian CSD.
On top of opening up settlement to Russian corporate bonds, Clearstream will also work with NSD to help customers easily settle transactions between their accounts at the two ICSDs, potentially increasing liquidity flow in the Russian market.
Jeffrey Tessler, CEO of Clearstream, said: “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.”
“Last year Clearstream received access to the Russian government bond market which resulted in a significant increase in market volumes, as well as in the number of market participants,” explained Alexander Afanasyev, CEO of Moscow Exchange.
“This year Clearstream has started to provide post-trade services on Russian corporate bonds. This move is a reflection of the interest of international investors in Russian corporate rouble-denominated debt. As was the case with government bonds, the arrival of international clearing organisations into the corporate bond market should provide for greater liquidity and reduced cost of borrowing. This will benefit both market participants and issuers alike.”
As a next step, Clearstream will look to offer settlement for equities via its direct link to NSD, due for summer 2014, in line with expected changes to Russian legislation.
Clearstream is continuing to settle equities in Russia via its indirect link to 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, said: “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 1 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.”
Eddie Astanin, chairman of the NSD executive board, described the links with Clearstream as “a positive sign of the progress made”, but urged caution.
“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 [the] launch is another big step in establishing Moscow as one of the global financial centres.”
