Foreign banks permitted to become direct clearing members of Russia’s NCC

Moscow Exchange has introduced separate trading member and clearing member status for participants on the Russian execution venue and central counterparty.

From today, foreign banks with clearing interests in the Russian market will be able to offer sponsored access to National Clearing Centre (NCC), the group’s CCP, enabling their clients to hold cash and collateral in the foreign bank’s accounts with NCC.

Under these changes, non-residents are authorised to take Individual Clearing Member (ICM) status, allowing them to trade on MOEX and independently clear and settle trades.

This will also provide non-residents with access to the Deposit with CCP segment of the money market, enabling them to manage cash positions in Russian rubles and foreign currency.

Moscow Exchange Group, NCC’s parent company, says that this will enable international clients trading on Moscow Exchange to minimise credit risk and to boost the volume of trading in Russian assets supported on MOEX.

NCC chief executive Eddie Astanin says: “These developments mean that NCC, as a qualified central counterparty, becomes a counterparty to trades executed by non-residents, ensuring settlement of the trades. This service will reduce the risks of non-resident clearing members which, in turn, will increase their trading limits on the Russian market.”

NCC will also act as tax agent for trades conducted on MOEX by non-resident clearing members and their customers, processing withholding tax and income tax on their behalf.

Speaking about this development, MOEX managing director for sales and business development, Igor Marich says that international participants account for close to 50 per cent of trading volume on the exchange’s equity and derivatives markets.

“Developing business with international participants strengthens MOEX’s position as a pricing centre for Russian assets and is part of our strategy. The opportunity for international financial institutions to become direct clearing members in all markets will allow them to expand their operations,” says Marich.