MARKET PROFILE RUSSIA

MARKET
PROFILE
RUSSIA
November 2016
National Settlement Depository
Your CSD for Russia and CIS
CONTENTS
01 02 03
GENERAL
INFORMATION
FINANCIAL
INSTRUMENTS
MARKET
PARTICIPANTS
04 05 06
CENTRAL
SECURITIES
DEPOSITORY
REGULATORY
BODIES AND LEGAL
FRAMEWORK
OF RUSSIAN
SECURITIES MARKET
SAFEKEEPING
AND SETTLEMENT
CORPORATE
ACTIONS
AND TAXATION
INFORMATION
SERVICES
07 08 09
CASH CLEARING
10 11 12
COMMUNICATION
STANDARDS
AND CONNECTIVIT Y
MAIN EVENT
CALENDAR
FOR 2015
AND 1H2016
RUSSIA’S
MACROECONOMIC
FRAMEWORK
COUNTRY
01
Russia
CURRENCY
Russian ruble (RUB)
GTM TIME
COUNTRY’S RATING
(IN FOREIGN CURRENCY, DECEMBER 2015)
+3 hours (Moscow time zone, DST not available)

Moody’s Rating
Moody’s Outlook
Ba1
negative

Fitch Rating
Fitch Outlook
BBB–
negative

S&P Rating
S&P Outlook
BB+
negative
MAIN EXCHANGE
GENERAL
INFORMATION
Р
The main exchange in the Russian Federation is PJSC “Moscow Exchange MICEX-RTS”
RUSSIAN FINANCIAL INSTRUMENTS:
TYPES OF SECURITIES

Equities and Russian depositary receipts (RDR)

Corporate bonds (including exchange-traded and commercial)

Government bonds (federal bonds, eurobonds)

Regional bonds (sub-federal bonds, municipal bonds)

Instruments of mutual funds market (investment units of mutual investment funds,
stocks of equity investment funds)

Mortgage-backed securities

Mortgage participation certificates

Clearing participation certificates
FOREIGN FINANCIAL INSTRUMENTS:
TRADING HOURS OF MOSCOW EXCHANGE
(MSK TIME)
ON-EXCHANGE TRADING VOLUME (1H2016)

Equities and depositary receipts (ADR, GDR)

Eurobonds

Corporate bonds

Government bonds

ETF

Instruments of mutual funds market (investment units of mutual investment funds,
stocks of equity investment funds)
Main Market sector (Securities Market)
09.30 – 19.00
FX Market
10.00 – 23.50
Money Market
09.30 – 19.00
Derivatives Market
10.00 – 23.50
Precious metals market
10.00 – 23.50
TOTAL TRADING VOLUME
RUB 382.9 trln

Securities Market
RUB 10.9 trln

Derivatives Market
RUB 63.2 trln

FX and Money Market
RUB 308.9 trln
Average daily on-exchange trading value (1H2016) RUB 4.04 trln
CENTRAL SECURITIES DEPOSITORY
National Settlement Depository (NSD)
CLEARING CENTRE
National Clearing Centre (NCC)
CENTRAL COUNTERPARTY
National Clearing Centre (NCC)
NUMBER OF BROKERS*
540
NUMBER OF DEALERS*
561
NUMBER OF ASSET MANAGERS*
453
NUMBER OF CUSTODIANS*
446
NUMBER OF REGISTRARS*
37
REGULATORY BODIES

Central Bank of the Russian Federation, http://cbr.ru/eng/

The Ministry of Finance of the Russian Federation, http://minfin.ru/en/

Federal Antimonopoly Service of the Russian Federation, http://en.fas.gov.ru/
* as at 29.07.2016
AVERAGE RUB/USD RATE
FOR THE PERIOD
(FOR REFERENCE)
2011
2012
2013
2014
2015
1H2016
29.35
31.07
31.85
38.61
61.32
70.10
5
02
FINANCIAL
INSTRUMENTS
The list of securities, traded on the Russian
market includes all main securities types:
There are two ways for placement
of new additional share issues:

Equities;

Fixed income;

Other securities (Instruments of mutual
funds market, Russian depositary
receipts, ETF, Mortgage-backed
securities, promissory notes etc.).
1. Individual ISIN code is assigned
to a new issue that circulates on
the market separately from the primary
issue. After three months from state
registration of the issue report of the
additional share issue it is joined to the
primary one and both issues become
fungible, or
Derivatives are considered as contracts
according to Russian legislation and not
recognized as securities.
EQUITIES
Equities are issued by joint stock companies.
All joint-stock companies are divided into
public and non-public companies. Only
shares of public joint stock companies are
subject to public offering and exchange trade
. The register of shareholders is kept
by registrars. The issuer has a right to change
the registrar and transfer the register to
another registrar. The entity cannot keep the
register by its own. For further information
please see part 3 of the Market Profile.
All shares are dematerialized and are
registered in electronic form. All new issues
must be registered with the Bank of Russia.
In order to execute a public offering (IPO)
procedure, issuer must complete the
following steps:

Decision on the securities issuance;

Registration of the securities;

Publication of the prospectus;

Placement of the securities;

State registration of the issue report.
2. New issue is assimilated with the primary
issue under the same ISIN at the stage
of placement if the certain criteria
are met:

public offering of the new additional
issue;

primary ssue is traded
on the exchange;

additional new issue shall be paid
by cash or other listed securities;

issuer intends to provide Regulator
with notification of placement
results.
According to Russian legislation, shares
can be divided into two broad types:

Common shares;

Preferred shares*.
There is no difference in settlement,
clearing and other market practices
between common and preferred shares.
This classification is in line with international
practice. With common shares investor
obtains rights to receive dividends, vote at
shareholder’s meetings on all agenda (unlike
preferred shares) and for a general claim over
company’s assets in liquidation.
Preferred shares should not exceed 25%
of registered capital. If dividend on preferred
shares was not paid fully, those shares gain
full voting rights. Such preferred shares
retain voting rights until the dividend is
paid. The charter of a company may have
a provision for the conversion of preferred
shares of a specific type into common shares
or into preferred shares of other types. The
conversion of preferred shares into bonds
or other types of securities is prohibited.
In case the equities are “CSD securities” type,
the CSD nominee account will be opened in
the register and in this case the registrar may
open nominee account only in CSD. If the
equities are “non-CSD securities” both CSD
and custodian can open nominee account
in the register.
Foreign investors may either keep their
equities on their owner account with the
registrar or to transfer them to a nominee
account of a custodian or CSD opened in the
register. Meanwhile custodian/CSD opens an
owner account for such investor in its books.
In case equities are “CSD securities” a CSD
nominee securities account will be opened
in the register and in this case a custodian
will open nominee account only in CSD. If the
equities are “non-CSD securities” both CSD
and custodian can open nominee account
in the register.
Foreign investors need to consider some
minor restrictions and thresholds monitoring
when purchasing shares of several types
of companies (in particular, shares of
banks, insurance companies and strategic
enterprises). For further information please
see part 5 of the Market Profile.
ISSUERS OF SHARES
2011
2012
2013
2014
2015
1H2016
NUMBER OF SHARE ISSUERS
320
275
273
254
249
245
NUMBER OF SHARE ISSUES IN QUOTATION LISTS**
119
118
110
106
111
111
CAPITALIZATION2**, BLN USD
776.1
817.1
776.1
408.5
469.2
494
CAPITALIZATION / GDP, %**
40.9
40.3
36.6
21.8
35.8
n/a
SHARE OF TEN MOST CAPITALIZED COMPANIES IN THE
TOTAL CAPITALIZATION OF THE EQUITY MARKET**, %
60.5
61.4
61.1
61.1
60.5
60.1
DIVIDEND YEILD, %
2.1
3.8
3.9
5.2
4.7
n/a
* Preferred shares might differ by the order of dividend payment, type, and other specific attributes according to the issuer decision
** Main Market sector of the Moscow Exchange
Source: Bank of Russia, Moscow Exchange Group
7
LIST OF THE MOST CAPITALIZED RUSSIAN COMPANIES (AS OF 30.06.2016)
OFZ MARKET VOLUME AND NON-RESIDENT SHARE IN 2013–2014 (END OF REPORTING PERIOD)
FIXED INCOME
Both on-exchange and OTC trading is
possible.
The main types of the Fixed Income
instruments on the Russian market are:
Investors may either keep their bonds on
their owner account with the CSD or transfer
them to a nominee account of a custodian
with the CSD, which has to open an owner
account for the investor in its books for this
purpose. Private investors cannot open such
accounts at NSD.
Government bonds;

Corporate, sub-federal and municipal
bonds.
About 1% of bonds are issued in
dematerialized form and are registered
in electronic form. The register of such
bondholders is kept by registrars.
About 99% of bonds are issued in the form
of Global certificates, which are immobilized
with NSD.
1.240
1.308
24.6
1.108
21.5
23.8
1.048
J
1.144
A
20.8
M
21.8
M
issued in USD and RUB, but may be issued
in other currencies (there has been talk
of EUR denominated issues in the past).
EUROBONDS
Source: Moscow Exchange Group

F
1.008
100.0
J
20.4
493.9
1.036
TOTAL
Eurobonds of the Russian Federation are
long-term bonds which are issued and settled
like all other Eurobonds. They are currently
20.8
60.1
988
296.7
D
1.031
Top-10 Total
N
20.9
2.7
Eurobonds of the Russian
Federation
O
20.2
13.1

S
959
MAGNIT (MGNT)
NON-RESIDENTS
SHARE IN %
A
19.9
10
Due to liberalization of the local government
bonds market, external influence on the
OFZ market environment, and then on other
segments of the ruble-denominated debt
market grew significantly in 2013 and 2014.
964
2.8
20.2
13.7
947
VTB (VTBR)
19.6
9
909
Source: Bank of Russia, NSD
864
2.8
18.6
13.9
18.0
Polyus (PLZL)
849
8
18.1
3.7
J
850
18.4
J
17.9
SURGUTNEFTEGAZ (SNGS)
M
892
7
A
19.0
4.2
M
878
20.9
F
18.7
GMK Noril'skiy nikel (GMKN)
J
877
6
D
875
6.2
N
24.2
30.5
O
23.6
NOVATEK (NVTK)
OFZ MARKET
VOLUME IN
PORTFOLIOS
OF NONRESIDENTS,
RUB BLN
910
5
S
24.7
7.2
A
929
35.5
J
24.9
LUKOIL (LKOH)
J
945
4
M
25.6
9.0
A
905
44.7
M
844
SBERBANK (SBER)
F
24.7
3
J
23.2
10.5
815
51.7
22.4
GAZPROM (GAZP)
836
2
1H2016
2015
22.2
11.0
850
54,3
22.7
ROSNEFT (ROSN)
898
2014
1
950
SHARE IN THE TOTAL CAPITALIZATION, %
20.0
CAPITALIZATION, BLN USD
24.3
ISSUER
Starting from February 2013 transactions with the Russian sovereign ruble bonds can be settled via the ICSDs (Clearstream and Euroclear).

GOVERNMENT BONDS
Government bonds are issued by the Ministry
of Finance. There are two types of the
government bonds on the market: Federal
bonds (OFZ) and Eurobonds of the Russian
Federation.
Federal Bonds (OFZ)
OFZ are mid- to long-term government
bonds, denominated in rubles. There are
three OFZ types: with fixed coupon rate,
with variable coupon rate and zero-coupon
(discount) bonds.
Prior to 2012, OFZ bonds were only traded
in a specific sector of stock exchange and
followed specific safekeeping and settlement
rules. After liberalization of the government
bond market in early 2012, OFZ trading was
moved to the main trading sector of Moscow
Exchange, and thenceforth the settlement
rules became the same as those in place for
corporate bonds or any other securities on
the market. OFZ can now be traded both onexchange and OTC.
EUROBONDS OF THE RUSSIAN FEDERATION,
BLN USD
2011
2012
2013
2014
2015
1H2016
29.2
34.9
40.7
48.2
45.7
52.0
Source: Bank of Russia, Ministry of Finance
CORPORATE, SUB-FEDERAL
AND MUNICIPAL BONDS
Corporate, sub-federal and municipal bonds
are issued by local entities, federal regions
and municipalities respectively. The issuing
process is the same as the one used for
equities (please see section “EQUITIES”).
Corporate bonds are usually placed and
traded on Moscow Exchange. They may
also have additional features, including put
options, early redemptions, floating coupon
rates and partial redemptions.
Clearstream and Euroclear announced
the launch of settlement with local rubledenominated corporate and municipal bonds
on January, 2014. This important stage of the
Russian financial market development was
preceded by a considerable amount of work
on improving the infrastructure. In particular,
amendments to the Tax Code of the Russian
Federation were adopted (came into force
on January 01, 2014). They significantly
simplified the disclosure standards for the
taxation purposes for the bonds issued after
January 01, 2012.
In May (for the first time in the Russian
infrastructure) and September 2016, the
Ministry of Finance placed its sovereign
Eurobonds worth $1.75 and $1.25 billion
respectively, where NSD acted as a head
depository and a tax agent. This proves that
the level of NSD’s technology and services
development is sufficient to meet the high
demands of issuers and investors.
OFZ
2011
2012
2013
2014
2015
1H2016
AMOUNT OUTSTANDING OF OFZ, BLN USD
87.1
108.5
113.7
83.4
76.6
77.1
AMOUNT OUTSTANDING OF OFZ TO GDP, %
5.0
5.3
5.6
4.4
6.4
n/a
EUROBONDS OF THE RUSSIAN FEDERATION,
BLN USD
29.2
34.9
40.7
48.2
45.7
52.0
Source: Bank of Russia, Ministry of Finance
8
9
CORPORATE & MUNICIPAL&SUB-FEDERAL BOND MARKET
NUMBER OF REGISTERED UNIT INVESTMENT FUNDS (AS OF 30.06.2016)
2011
2012
2013
2014
2015
1H2016
TYPE OF FUND
OPEN-END FUND
INTERVAL FUND
CLOSED-END FUND
TOTAL
NUMBER OF BOND ISSUERS
312
317
336
359
376
380
EQUITY FUND
111
9
24
144
NUMBER OF BOND ISSUES
681
804
948
1,084
1,167
1,196
FIXED-INCOME FUND
72
0
1
73
OUTSTANDING AMOUNT OF DOMESTIC CORPORATE
BONDS, BLN USD
116.9
134.1
162.6
117.7
110.7
130.7
HYBRID FUND
70
13
33
116
OUTSTANDING AMOUNT OF DOMESTIC CORPORATE
BONDS TO GDP, %
6.2
6.6
7.7
6.3
8.4
n/a
MONEY MARKET FUND
9
0
0
9
OUTSTANDING AMOUNT OF MUNICIPAL BONDS,
BLN USD
14.4
14.1
15.6
9.5
7.9
8.8
INDEX FUND
18
0
0
18
FUND OF FUNDS
53
1
1
55
COMMODITY FUND
0
5
1
6
HEDGE FUND
0
12
14
26
MORTGAGE BACKED FUND
0
0
7
7
ART FUND
0
0
1
1
VENTURE INVESTMENT FUND
0
0
48
48
REAL ESTATE FUNDS
0
0
584
584
DIRECT INVESTMENT FUNDS
0
0
143
143
RENTAL FUND
0
0
86
86
LOANS FUND
0
0
64
64
333
40
1,007
1,380
MARKET’S PLACEMENTS OF NEW CORPORATE BOND ISSUES
NUMBER OF BOND ISSUERS
133
179
232
61
182
55
NUMBER OF NEW ISSUES
171
229
285
68
235
59
32.1
39.3
53.0
46.1
36.5
12.3
PLACEMENT VALUE OF CORPORATE BONDS,
BLN USD
MARKET’S PLACEMENTS OF NEW MUNICIPAL BOND ISSUES
NUMBER OF BOND ISSUERS
34
39
41
44
43
42
NUMBER OF NEW ISSUES
18
35
34
26
30
7
1.8
3.8
4.8
2.9
1.6
0.4
PLACEMENT VALUE OF MUNICIPAL BONDS,
BLN USD
Source: Moscow Exchange Group
Exchange-traded bond is a debt security
that allows issuer to attract additional
financial resources for any term using a
simplified issuance procedure designed for
a wide range of investors. The maturity of
exchange-traded bonds is not defined. The
issue of exchange-traded bonds does not
require state registration, this function is
performed by the exchange that allocates
an identification code to the issue and
authorizes its listing in accordance with
the listing rules.
The requirements for the exchange-traded
bonds prospectus are less demanding than
for the prospectus of “classic” bonds.
Exchange-traded bonds can circulate both
on the market exchange and OTC.
OTHER SECURITIES
INVESTMENT FUNDS UNITS
Investment fund units (IFUs) represent
the share of an investment fund’s assets
managed by an asset management company.
IFUs are issued in dematerialized form and
are kept with a special registrar company
or specialized depository, which maintains
a register of investment fund shareholders.
Investors may either keep their IFUs on
their owner account with the specialized
depository, or transfer them to a nominee
account owned by a custodian or CSD,
which must open an owner account for the
investor in its books for this purpose. The
CSD nominee account might also be opened
within registrar if IFUs are to be traded
on market exchange according to the rules
of trust management.
IFUs may be issued, traded and redeemed
by an investor via services provided by asset
management companies. The IFUs may
be traded OTC or on-exchange (if listing is
specifically allowed under the fund’s asset
management rules, in this case only nominee
holder account of CSD shall be opened by
registrar of investment fund shareholders).
TOTAL
Source: National League of Management Companies
RUSSIAN DEPOSITARY RECEIPTS
Russian depositary receipts (RDRs) are
securities certifying investor’s rights to a
certain number of foreign securities. RDRs
are generally similar to the other types of
depositary receipts (ADRs, GDRs), are issued
in dematerialized form and may be traded
both OTC and on-exchange. There has only
been one RDR issue so far: an RDR on RUSAL
shares, which were originally traded on the
Hong Kong Stock Exchange.
ETF
In April 2013 the Moscow Exchange
launched the trades with the first foreign ETF
(exchange traded funds) — an instrument
that reflects the dynamics of a certain asset:
index, bonds, equities, etc. FinEx Funds plc
(Ireland) was the first foreign company listed
on the Moscow Exchange. FinEx Plus asset
management company acts as its authorized
representative in Russia.
the securities of the foreign exchange traded
fund on the Russian exchange.
PROMISSORY NOTES
Promissory notes are issued in physical
form. Promissory notes are not popular
with investors due to the fact they come
in physical form, and the high risks that derive
from this; and they are commonly used in
banking activities and as a means of payment.
Since 2012 due to legislation changes
promissory notes may not be recorded
on securities accounts with a depository.
IDENTIFICATION
OF SECURITIES
The following securities identifiers are used
on the Russian market:

State registration number, allocated
by the Bank of Russia and the Russian
Finance Ministry during the security
issue process.

The unique code of the issue
(Identification number of issue) of
exchange-traded bonds is assigned by
the Russian Exchange. The unique code
of the issue (Identification number of
issue) of commercial bonds are issued
by CSD.
Currently, 11 ETF are traded on Moscow
Exchange.
Article 51.1 of the Federal Law 39-FZ “On the
Securities Market” governing the placement
and circulation of the foreign issuers’
securities is fundamental for the ETF market.
Another important legislative act is the Order
of the Federal Service for Financial Markets
(FSFM) No. 10-5/pz-n. Among other things,
this Order regulates the conditions of listing
10

All numbers/codes reflects the type of
security and unique code of the issue.
The structure of the code may vary
according to the instrument type.

ISIN code is accepted by most of the
settlement institutions in Russia (except
registrars that use the State registration
number). All Russian securities actively
traded on the market already have ISIN
codes*. ISIN codes are allocated by NSD
as the Russian NNA.

CFI codes as well as ISIN codes are
required for recognition of a foreign
instrument as a security permited for
operations on the Russian market.
Both codes can be allocated for foreign
instruments with assistance of NSD who
as the Russian NNA coordinates this
process with foreign NNAs.
Other identification codes may exist on the
market, including stock exchange identifies
and internal codes allocated by local
custodians.
* Under the former legislation, one ISIN code could be
assigned to each particular security type belonging to
the issuer. As of now, practically each issue of securities is
assigned its own ISIN code.
11
The following market participants exist on the
Russian securities market:
03
MARKET
PARTICIPANTS

Central Securities Depository – legal
entity servicing on-exchange and OTC
transactions with all types of debt and
equity securities of Russian issuers
and providing settlement services to
professional market participants of
Russian securities market, may open
foreign nominee securities accounts
for ICSDs and foreign CSDs (please see
part 4);

Registrars – legal entities maintaining
registers of share owners and providing
basic settlement services;

Custodians – legal entities providing
safekeeping and settlement services;

Brokers and dealers – legal entities
trading securities and derivatives on
behalf of their clients and on their own
behalf;

Exchanges – legal entities providing
trading facilities;

Clearing organizations – legal entities
providing clearing and netting facilities
for market participants;

Asset managers – legal entities providing
asset managing services for client’s
portfolios of securities.
All market participants act on the basis of
licenses, issued by the Federal Financial
Markets Service or its successor – the
Central Bank of the Russian Federation (On
September 1, 2013, the FFMS was annulled
by Presidential Decree No.645 dated 25 July
2013. The functions of regulation, licensing,
control and supervision of the financial
markets were transferred to the Central Bank
of the Russian Federation). There are specific
requirements (including capital requirements)
for every license type and there are certain
limitations for combinations of licenses, held
by professional participant.
REGISTRARS
Registrars are professional Russian securities
market participants, allowed to maintain the
shareholder register of joint-stock companies.
Registrars carry out the following functions:

Maintain the register of owners
of securities;

Open and maintain clients’ accounts;

Maintain records of property rights
on securities;

Perform other functions according
to Russian legislation.
Registrars’ activity is exclusive and may not be
combined with any other business.
Each issuer must have its register kept by a
single registrar. Each issuer may choose to
change registrars, and transfer the register
from one registrar to another. The registrar
provides services to issuers based on contract
concluded with the issuer, and the relevant
legislation.
Registrars are allowed to open owner,
nominee, trustee, deposit, treasury account
for the issuer and other types of accounts
according to Russian legislation. Registrars are
not entitled to conduct banking activities and
therefore may not open banking accounts.
Opening an account with the registrar and
settling transactions in its books is governed
by the relevant legislation (no contract is
signed between the registrar and registered
person / legal entity).
Registrars may only process FOP transactions.
They carry out transactions between
accounts based on the transfer instructions
sent by the deliverer. No matching instruction
from the receiver is required for such
operations. For CSD accounts is a special
order – matching instruction from CSD is
required.
The Federal law on CSD stipulates that since
accounts are opened with registrars by CSD,
only No Change of Beneficial Ownership
(NCBO) transactions may be processed by
registrars. There is an exception only for
inheritance and redemption of shares by the
issuer, etc. if provided by law.
Registrars gather the lists of shareholders
for specific corporate actions in accordance
with the requests of the issuer. They request
nominees and CSD and add the information
they receive about shareholders to their
list. Registrars also act as an intermediary
between the issuer and registered persons /
legal entities, transferring official information
with regard to corporate actions.
The Bank of Russia is responsible for the
supervising, regulating and monitoring
all Russian registrars. There are 37 (as of
August2016) registrar licenses on the Russian
securities market. The number of registrars
on the market is gradually falling due to the
ongoing process of consolidation.
CUSTODIANS
Custodians are professional Russian securities
market participants , providing settlement
and safekeeping services for local and foreign
investors.
Custodians perform the following functions:

Opening and maintaining securities
accounts;

Safekeeping of securities, and provision
of settlement services (including
pledging and blocking of securities);

Providing information regarding
corporate actions and assisting clients in
the performance of their rights;

Providing additional services, which
improve the quality of the core custody
services.
Custodian activity may be combined
with clearing or broker, dealer and asset
management activities.
Custodians may open owner and nominee
accounts with the CSD, registrars*, foreign
custodians or clearing organizations. If a
custodian has its own portfolio of securities, it
must be strictly segregated from securities of
its clients, both internally and externally.
Custodians may open owner, nominee,
pledgee and trustee accounts for their clients.
As of July 1st, 2012 custodians may also open
nominee accounts for foreign entities**.
Custodian may also open bank accounts if
they have a banking license issued by the
Bank of Russia.
Custodians are allowed to hold all types of
securities that exist on the Russian market.
They may conduct both FOP and DVP
transactions (if they have a banking license).
Transactions between custody accounts
require matching instructions from both
counterparties.
Custodians inform their clients about
corporate actions, after receiving official
information from issuers and registrars
or after obtaining it from other sources
(CSD, information agencies, mass media).
Custodians disclose the lists of shareholders
of a specific security at the request of CSD or
registrar. Custodians provide services related
to participation of their clients in voluntary
and mandatory corporate actions.
The Bank of Russia is the main regulator for
Russian custodians. The Bank of Russia also
oversees the custodians that have a banking
license. The safekeeping and settlement
system in Russia is represented by 486
custodians (as of 2015).
BROKERS
AND DEALERS
Brokers are professional market participants
trading in the name of and on behalf of their
clients, or in their own name but on behalf
of the client. Under Russian legislation,
brokerage activity may be combined with
custody, dealer and asset manager activities.
It is also possible for banks to obtain
a brokerage license and thus open brokerage
accounts for their clients.
Russian brokers provide a wide range of
services for both local and foreign clients,
including on-exchange and OTC trading and
* Only until the law on CSD will come into full effect and
CSD will open nominee accounts with all registrars for
CSD securities.
** Previously it was only possible to open owner account
to foreign custodians due to the lack of foreign nominee
principle on the Russian market.
13
access to the foreign markets.
Dealers are professional market participants
trading securities at their own expense and
on their own behalf. Dealer licenses are
usually acquired by banks and investment
companies for their own investment and
trading activity.
There are 611 broker and 629 dealer licenses
SETTLEMENT CYCLE IN TRADING MODES
on the Russian market (as of 2015).
MODE
EQUITIES, INVESTMENT FUND UNITS, RUSSIAN
DEPOSITARY RECEIPTS, ETF SHARES, OFZ
BONDS
T+2, CCP
T+0, CCP
T+0..2, CCP
T+0..2, CCP
MAIN TRADING (ANONYMOUS TRADING)
NUMBER OF PROFESSIONAL PARTICIPANTS
PROFESSIONAL PARTICIPANTS
IN THE SECURITIES MARKET
2011
2012
2013
2014
2015
1H2016
1,378
1,259
1,149
1,079
875
799
1,090
983
885
803
611
540
DEALER ACTIVITY
1,088
984
887
817
629
561
ASSET MANAGERS
987
880
782
706
518
453
T+0/T+1, CCP
T+0..2/T+0..90, absent CCP
DARK POOL
T+0, absent CCP
–
SECURITIES MARKET (EQUITY & BOND MARKET) OF MOSCOW EXCHANGE*
Source: Bank of Russia
14
REPO (ANONYMOUS DEALS)
REPO (NEGOTIATED DEALS)
BROKER ACTIVITY
ASSET MANAGERS

Moscow Exchange;

MICEX Stock Exchange;
Asset managers are professional Russian
securities market participants managing
unit investments trusts (UITs), combined and
segregated clients’ accounts. Depending on
the type of management provided, assets
can be invested in various types of securities,
both Russian and foreign, currencies, real
estate, commodities or deposited in banks.

National Settlement Depository;

National Clearing Centre;

National Mercantile Exchange;

and others.
There are 518 asset manager licenses which
are issued by the Bank of Russia (as of 2015).
Other organizations licensed as professional
securities market participant to carry out
activities for the organization of trading
in securities and / or the stock exchange:
Stock company Saint-Petersburg Currency
Exchange (SPCEX SC), PJSC “Saint
Petersburg’s Exchange”. These stock
exchanges’ share of the total value of
securities and derivatives trading is about
0.1%.
The main exchange on the Russian financial
market is the Moscow Exchange Group
(Moscow Exchange, MOEX), which processes
almost all on-exchange operations. The
exchange was created after the merger
of two major Russian exchanges: MICEX
(Moscow Interbank Currency Exchange)
and RTS (Russian Trading System) in 2011.
The Moscow Exchange Group now unites
a number of companies, providing wide
range of exchange, settlement and clearing
services:
T+0..30, absent CCP
T+0..1/T+0..2, CCP
LICENSES HELD BY PROFESSIONAL INTERMEDIARIES
EXCHANGE
NEGOTIATED DEALS
The Moscow Exchange Group’s share of the
total value of local on-exchange securities
and derivatives trading is about 99.9%.
The following markets are present
on the Moscow Exchange Group now:

Securities (Equity & Bond) Market;

Derivatives Market;

FX Market;

Money Market;

Precious metals market.
EQUITY & BOND MARKET (EQUITIES,
BONDS, INVESTMENT FUND UNITS,
DEPOSITARY RECEIPTS AND ETF SHARES)
MAIN MARKET SECTOR
Equities, bonds, investment fund units
and foreign securities (equities, Russian
depositary receipts, bonds and ETF shares)
are listed on the Main Market. There are a
number of trading modes available for market
participants in the sector, including Main
trading, Negotiated deals, Dark pool trading,
repo mode and others.
2011
2012
2013
2014
2015
1H2016
TRADING VOLUMES, BLN USD
1,042.8
776.6
753.0
541.1
335
178
TRADING VOLUME TO GDP, %
54.9
38.3
35.6
28.9
25.5
n/a
TRADING VOLUME OF TOP-10 MOSTLY
TRADED STOCKS, %
85.4
83.5
80.0
80.0
76.6
75.9
Source: Moscow Exchange Group
* without repo transactions
In the Main Market over 1,800 securities from
roughly 700 Russian issuers are available for
trading every day. Trading is possible from
9.30 to 19.00.
National Clearing Centre acts as a CCP for
purchase and sales transactions in the Main
Market sector.
15
TOP-10 MOSTLY TRADED STOCKS ON THE MOSCOW EXCHANGE (FOR THE HALF YEAR ENDED 30.06.2016)
NO.
ISSUER
MONEY RAISED ON THE PRIMARY MARKET OF THE MOSCOW EXCHANGE, BLN USD
TRADING VOLUME SHARE, %
2011
2012
2013
2014
2015
1H2016
1.
“SBERBANK” (SBER)
27
OFZ / OBR
43.6
25.7
25.4
3.7
10.8
8.6
2.
“GAZPROM” (GAZP)
14
33.8
42.8
57.9
48.2
32.1
14.3
3.
“LUKOIL” (LKOH)
8
BONDS (CORPORATE, MUNICIPAL,
INTERNATIONAL FINANCIAL ORGANIZATION,
FOREIGN ISSUERS)
4.
“NORNICKEL” (GMKN)
6
STOCKS
1.8
0.1
2.0
0.7
0.8
0.1
5.
“MAGNIT” (MGNT)
5
TOTAL
79.2
68.6
85.3
52.6
43.6
22.9
6.
“ROSNEFT” (ROSN)
4
7.
“VTB” (VTBR)
3
8.
“SURGUTNEFTEGAZ” OJSC – preferred (SNGSP)
3
Derivatives are traded on the Derivatives Market of the Moscow Exchange. The market trades a wide range of futures and options (index, equities
and commodities). Clearing is performed by the National Clearing Centre, which also acts as a CCP.
9.
SBERBANK – preferred (SBERP)
2
The trading is conducted during two sessions: from 10.00 to 18.45 and from 19.00 to 23.50.
10.
“MOSCOW EXCHANGE” MOEX
2
TRADING VOLUME ON DERIVATIVES MARKET, BLN USD
TOTAL
76
Source: Moscow Exchange Group
DERIVATIVES MARKET
INSTRUMENT
2011
2012
2013
2014
2015
1H2016
FOREIGN CURRENCIES
287.6
430.1
489.8
814.6
1,018.9
608.7
4.3
7.1
5.8
2.4
0.4
0.3
163.1
93.2
109.7
87.8
49.8
30.3
1,421.5
1,045.5
873.9
659.3
330.9
228.8
58.3
32.4
46.8
24.3
71.5
99.8
1,934.9
1,608.3
1,526.1
1,588.4
1,471.5
967.8
Source: Moscow Exchange Group
CORPORATE BONDS ON THE FIXED INCOME MARKET OF THE MOSCOW EXCHANGE*
INTEREST RATES
2011
2012
2013
2014
2015
1H2016
NUMBER OF BOND ISSUERS
306
308
328
323
347
341
NUMBER OF BONDS ISSUED
673
793
937
950
1,039
1,050
177/410
185/495
187/548
194/536
154/642
138/442
175.1
170.1
193.2
110.5
72.5
28.6
INCLUDING THOSE LISTED (ISSUERS / ISSUES)
TRADING VOLUME OF CORPORATE BONDS,
BLN USD
Source: Moscow Exchange Group
SUB-FEDERAL AND MUNICIPAL BONDS ON THE FIXED INCOME MARKET OF THE MOSCOW EXCHANGE**
2011
2012
2013
2014
2015
1H2016
NUMBER OF BOND ISSUERS
34
44
46
47
46
44
NUMBER OF BONDS ISSUED
87
93
105
113
116
114
34/87
24/53
30/61
40/86
40/95
38/96
16.0
14.3
14.4
9.8
6.5
2.7
TRADING VOLUME OF SUB-FEDERAL AND
MUNICIPAL BONDS, BLN USD
INDEXES
COMMODITIES
TOTAL
Source: Moscow Exchange Group
TRADING VOLUME ON DERIVATIVES MARKET, MLN OF CONTRACTS
* without repo transactions and new issues
INCLUDING THOSE LISTED (ISSUERS/ISSUES)
SECURITIES
INSTRUMENT
2011
2012
2013
2014
2015
1H2016
FOREIGN CURRENCIES
264.6
413.1
460.4
750.6
982.9
559.3
7.6
21.3
17.4
9.2
2.6
1.9
SECURITIES
371.2
247.5
310.1
347.2
306.8
165.1
INDEXES
417.2
357.0
310.1
286.0
195.1
148.6
COMMODITIES
37.1
22.4
36.5
20.2
123.1
219.2
1,097.6
1,061.2
1,134.5
1,413.2
1,610.5
1,128.1
INTEREST RATES
TOTAL
Source: Moscow Exchange Group
** without repo transactions and new issues
Source: Moscow Exchange Group
FX MARKET
The FX Market of the Moscow Exchange
is one of the key segments of the Russia’s
financial market. The participants in the
market can trade a wide range of currencies,
16
including USD, EUR, CNY, GBP, HKD, UAH,
KZT, BYR. The market also provides facilities
for currency swap contracts.
The trading hours differ depending on the
currency traded and scheduled from 10.00
to 23.50.
The National Clearing Centre acts as a
clearing house and CCP on the market.
17
TRADING VOLUME ON THE FX MARKET, BLN USD
VALUE OF TRADES, BLN USD
2011
2012
2013
2014
2015
1H2016
1,604.5
1,980.8
1,799.0
2,013.8
1,680.6
844.7
USD/RUB
1,456.3
1,795.8
1,548.7
1,738.4
1,503.3
757.6
DIRECT REPO WITH BANK OF RUSSIA
EUR/RUB
132.6
164.8
202.4
235.1
148.8
75.4
EUR/USD
6.8
12.4
44.7
33.5
17.2
CNY/RUB
0.2
0.2
0.6
6.5
OTHER CURRENCIES (CIS CURRENCIES)
2.5
6.1
2.5
1,360.3
1,784.2
USD/RUB – 1 DAY
1,023.7
EUR/RUB – 1 DAY
INSTRUMENT
2011
2012
2013
2014
2015
1H2016
3,875.3
5,450.4
6,522.5
4,745.2
2,951.6
2,072.5
735.2
2,753.0
3,974.1
2,616.1
1,200.7
415.6
INTER-DEALER REPO STOCKS AND RDR
1,030.5
1,044.3
1,007.0
691.3
231.9
111.7
8.2
INTER-DEALER REPO OFZ/OBR
1,008.3
671.1
330.2
203.2
94.6
54.1
10.9
3.1
INTER-DEALER REPO OTHER BONDS
1,082.4
884.7
993.4
585.9
336.4
306.5
0.4
0.4
0.5
OTC REPO WITH BANK OF RUSSIA
7.6
83.7
92.7
0.0
0.0
0.0
3,099.5
3,966.0
3,422.2
1546.5
REPO WITH CCP
0.0
0.0
117.7
648.4
1,088.0
1184.6
1,338.7
2,445.8
3,122.9
2,673.5
1248.3
REPO IN STANDARD/CLASSICA SECTOR
11.3
13.6
7.2
0.2
0.0
0.0
301.0
404.7
616.8
674.6
560.0
223.6
309.6
300.3
407.1
549.2
534.8
289.1
EUR/USD – 1 DAY
27.7
16.3
36.4
86.2
124.7
40.8
BANK OF RUSSIA LOANS WITHOUT COLLATERAL
0.0
0.0
0.0
0.0
0.0
0.0
CNY/RUB – 1 DAY
0.0
0.0
0.5
1.3
2.6
2.7
BANK OF RUSSIA DEPOSIT OPERATIONS
304.2
271.0
248.7
263.8
293.8
223.2
SWAPS (OVER 1 DAY) AND FORWARDS
7.8
24.5
0.5
80.9
61.4
31.7
BANK OF RUSSIA LOMBARD LOANS
1.1
1.2
0.9
0.7
0.3
0.0
2,964.7
3,765.0
4,898.5
5,979.8
5,102.8
2,391.6
FEDERAL TREASURY DEPOSIT OPERATIONS
0.0
20.5
124.2
239.6
210.9
55.6
VEB DEPOSIT OPERATIONS
4.3
7.6
7.1
6.9
12.7
5.1
DEPOSIT OPERATIONS OF THE PENSION FUND
OF THE RUSSIAN FEDERATION
0.0
0.0
26.2
37.1
8.7
2.3
DEPOSITS OF AGENCY FOR CREDIT GUARANTEES
0.0
0.0
0.0
1.0
8.5
2.9
4,184.9
5,750.7
6,929.6
5,294.4
3,486.4
2,699.8
SPOT
SWAP
TOTAL (SPOT + SWAP)
Source: Moscow Exchange Group
PRECIOUS METALS MARKET
On October 21, 2013 Moscow Exchange
launched precious metals spot-trading in gold
(GLD) and silver (SLV). Platinum and palladium
trading is due in the future if there is interest
from market participants.
Prices for precious metals are quoted in RUB
per gram. Trades are settled in RUB.
codes. In 2014 risk transfer (risk balancing)
between derivatives market and FX market
was launched and trading members and
clearing members statuses became available
(regulatory and technical readiness to
service clearing members (being non-trading
members)).
MONEY MARKET
Precious metals trading is conducted
on the FX Market's trading platform.
The REPO market has been part of the
Moscow Exchange since 2002; it includes
direct REPOs with the Bank of Russia and
Federal Treasury, reverse REPOs with the
Bank of Russia (modified REPOs), inter-dealer
REPOs and REPO with CCP. Repo with CCP is
a type of on-exchange repo trade whereby
the CCP (National Clearing Centre) acts as the
trading participant’s counterparty.
The National Clearing Centre acts as the
central counterparty and clearing house.
Trading members enjoy the high-efficiency
and reliable risk management system of
FX Market, unified positions with currency
instruments, and existing registration
Bank of Russia deposit and credit operations
on the Moscow Exchange consist of deposit
and credit transactions made by the Bank of
Russia with credit organizations – residents of
the Russian Federation – through the Moscow
Exchange Electronic Trading System.
Precious metals are traded from 10.00 to
23.50 MSK with standard value date TOM. TOD
and LTV (with value dates from T+2 up to 6M)
are available for off book trades only. Value
dates for swap deals with precious metals are:
O/N, TOM/SPT, 1W, 1M, 6M.
For Bank of Russia deposit operations,
the Moscow Exchange provides credit
organizations with the opportunity to make
deposit transactions, that is, placing funds
with the Bank of Russia at an interest rate
established by the Bank of Russia. For Bank
of Russia credit operations, or collateral credit
operations, the Moscow Exchange provides
credit organizations with the opportunity to
obtain credit from the Bank of Russia on the
garantee of their own securities (or against
blocking of those securities).
The VEB deposit operations was started in
2009, the Federal Treasury deposit operations –
in 2012, the Pension Fund of the Russian
Federation – in 2013 and Agency for Credit
Guarantees – in 2014.
TYPE OF OPERATION
REPO OPERATIONS
CREDIT MARKET
TOTAL (REPO + CREDIT MARKET)
Source: Moscow Exchange Group
INVESTORS
To trade on the Moscow Exchange Group investors must choose a brokerage firm or bank authorized to trade on its markets.
The services offered and the alternatives for accessing the market will differ depending on each broker’s profile.
INVESTORS ON THE EQUITY & BOND MARKET OF THE MOSCOW EXCHANGE GROUP
2012
CLIENT GROUP
2013
2014
2015
1H2016
CLIENTS
TRADING
VOLUME
SHARE, %
CLIENTS
TRADING
VOLUME
SHARE, %
CLIENTS
TRADING
VOLUME
SHARE, %
CLIENTS
TRADING
VOLUME
SHARE, %
CLIENTS
TRADING
VOLUME
SHARE, %
INDIVIDUALS
805,549
36
881,844
34
945,143
34
1,006,366
34
1,028,991
35
ENTITIES
17,821
14
19,539
10
20,178
7
20,752
9
19,118
9
NON-RESIDENTS
5,876
38
6,957
40
7,486
47
8,727
44
9,251
45
NON-RESIDENTS – INDIVIDUALS
2,073
n/a
2,553
n/a
3,113
n/a
4,314
n/a
5,517
n/a
NON-RESIDENTS – ENTITIES
3,803
n/a
4,404
n/a
4,373
n/a
4,413
n/a
3,734
n/a
5,261
3
5,182
4
5,142
3
3,836
4
1,411
3
481
9
766
11
700
9
627
8
n/a
8
834,448
100
921,245
100
978,649
100
1,040,308
100
1,068,022
100
ASSET MANAGERS
BANKS AND BROKERS PROP TRADING
TOTAL
Source: Moscow Exchange Group
18
19
04
CENTRAL
SECURITIES
DEPOSITORY (CSD)
THE CSD LAW

The Bank of Russia should approve the
key internal documents of the CSD;
Lengthy discussions regarding the
implementation of the CSD on the Russian
market led to the adoption of the Federal
Law of the Russian Federation No. 414-FZ
“On the Central Securities Depository” dated
December 7, 2011.

The CSD should have a minimum capital
of at least RUB 4 bln;

The Law established:

Legal status of CSD and the operational
requirements;

Procedure for granting CSD status;

Government supervision of CSD activity.
The CSD should be a non-banking credit
organization and a joint-stock company;

The CSD should set up users’
committees to oversee its activities;
Specific CSD accounts should be
opened with the registrars of the
following CSD securities:

The key provisions and requirements set
out in the Federal Law on Central Securities
Depository:

The CSD should conduct an operating
audit at least once every two years, in
accordance with international standards;

Equities which have their
prospectus registered with the Bank
of Russia;
Investment fund units which
may be traded on the exchange
in accordance with the asset
management rules.
All operations regarding the nominee
account of the CSD in a registrar will be
initiated by the matching orders from
both parties;

Reconciliation of equities on CSD
accounts should be carried out after
every transaction;

All CBO transactions take place only in
CSD bringing settlement finality on the
Russian securities market.
The Central Securities Depository may open
foreign nominee securities accounts for
ICSDs and foreign CSDs. The list of eligible
ICSDs / CSDs is defined by FFMS’s order No.
12-65/pz-n of July 27, 2012.
The law on CSD (and satellite law No. 415FZ, which alters a number of existing laws
to implement the law on CSD) also allows
Russian custodians to open foreign nominee
accounts for their foreign counterparts,
except for foreign CSDs and ICSDs.
On November 6, 2012 the FFMS granted
the CSD status to National Settlement
Depository.
NATIONAL
SETTLEMENT
DEPOSITORY
under the registered name of “NSD Payment
NSD is Russia’s national numbering agency
System”.
and a substitute numbering agency for
National Settlement Depository (NSD)
agency Thomas Murray has assigned NSD an
Operating Unit authorized to allocate Legal
holds the status of the central securities
AA- rating as a central securities depository.
Entity Identification (LEI) codes to market
depository* of the Russian Federation and
After becoming a CSD, NSD now satisfies the
participants.
is part of the Moscow Exchange Group. NSD
definition of an Eligible Securities Depository
was founded on June 27, 1996. The total
under Rule 17f-7 of the Investment Company
Delivery versus payment (DVP) is NSD’s one
value of securities held on accounts reached
Act of 1940.
of the core settlement services, which covers
USD 502 bln as of December 31, 2015.
NSD pays great attention to its risk
magament system. The international rating
the CIS, assisigning ISIN and CFI codes
to financial instruments. In March 2013
NSD was granted the status of pre-Local
all settlement models (DVP 1, 2, 3) operating
NSD has the status of a non-banking credit
with cash accounts opened with NSD (in RUB,
In 2014 the Bank of Russia recognized NSD
organization with a special type of banking
USD, EUR, CNY, HKD, GBP, CHF) and cash
the systemically important central securities
license giving permissions to open banking
accounts opened with the foreign banks (in
depository, settlement depository and trade
accounts and conduct cash settlements.
USD): Citibank, N.A., New York, JP Morgan
repository. The NSD payment system has
NSD provides storage of global certificates
Chase Bank N.A., New York and Deutsche
a status of the systemically and nationally
and depository accounting for 99.9% of
Bank Trust Company Americas, New York. The
important system.
corporate, sub-federal and municipal bond
value of transactions in USD via foreign banks
issues. It services 100% of transactions
and NSD reached USD 40.99 bln by the end
conducted in the federal bond (OFZ) and the
of the 2015.
NSD offers professional market participants
of the Russian securities market a wide range
of services on-exchange and OTC, including
settlement and depository services, OTC
trade registration services (trade repository),
collateral management and information
services. The Bank of Russia has assigned the
status of a payment system operator to NSD
* The status of the central securities depository was
assigned to NSD by the Federal Financial Markets
Service’s Order No 12-2761/PZ-I dated November
6, 2012. NSD holds professional securities market
participant license No 177-12042-000100 to perform
depository operations issued by the Central Bank of the
Russian Federation on February 19, 2009. License No
3294 to perform banking operations was issued by the
Central Bank of the Russian Federation on July 26, 2012.
License No 077-00004-000010 to carry out clearing
activities was issued by the Central Bank of the Russian
Federation on December 20, 2012.
Bank of Russia bond markets, more than 99%
of transactions conducted in the corporate
and regional bond markets, the majority
of transactions involving equities, and also
services investment fund units and securities
of foreign issuers (all CSD eligible securities).
As of now, NSD has accounts with central
securities depositories and international
central securities depositories of 8 countries,
as well as correspondent accounts with a
number of the largest foreign and Russian
banks. NSD performs safekeeping of
It is very important indicator for NSD that
DVP transactions significantly increased in
recent years. Development of DVP is one of
NSD’s key priorities. In 2014 NSD launched
electronic matching and hold&release
services accompanying DVP and FOP
settlement on the Russian market. Bringing
into life primary measures, aimed at DVP
development NSD has launched DVP
settlement via RTGS system, providing an
option to settle deals using “central bank
money”.
securities of issuers from more than 40
A flagship service that NSD introduced in
countries.
2013 has been the provision of collateral
21
management support for OTC transactions
Clients may open the following types
with the Central Bank of the Russian
of securities accounts:
Federation. This provides a tool through

Owner securities account;
which the Central Bank can deliver liquidity

Nominee securities account;

Trustee securities account;

Foreign nominee securities account;

Trading securities account;

Treasury securities account;
In May 2015, NSD and the Federal Treasury

Clearing securities account.
launched a system providing liquidity to
For any additional information about custody
into the banking system via repo transactions
between the Central Bank and commercial
banks. Total value of settled transactions
reached USD 503 bln by the end of the2015.
commercial banks on the basis of tri-party
repo transactions. Total value of settled
transactions reached USD 235 bln by the end
of the 2015.
The new service uses the tri-party repo
scheme which proved to be in demand
among market participants in respect of the
Bank of Russia’s repo transactions with the
securities basket. NSD performs clearing and
settlements functions and acts as a collateral
management agent in the tri-party repo
transactions.
Another step in the development of this
tri-party services is to support on-exchange
and OTC repo transactions between two
commercial banks thus providing an avenue
for secured inter-bank lending. NSD has plans
to offer a new collateral management tool,
which allows market participants to utilize
advantages of securities basket for OTC
interdealer transactions.
OPENING SECURITIES ACCOUNTS
NSD opens custody accounts to legal
entities residents and non-residents,
Russian depositories, foreign nominee
holders according to the legislation of the
Russian Federation and the Bank of Russia
regulations.
NSD provides services to professional
securities market participants. NSD’s clients
include major Russian banks, brokers, and
financial companies.
accounts please visit: https://www.nsd.ru/
en/services/open_sec_acc/
To open a securities account with NSD,
a client must:

Submit a set of documents to NSD, as
per the List of Documents to Be

Submitted by Clients to NSD;

Enter into a securities account
agreement for the relevant securities
account type. Standard forms of
securities account agreements
are available on NSD’s web site. An
agreement form may also be obtained
at NSD’s Moscow office.
The specific provisions governing the
opening of securities accounts of a particular
type and the eligibility requirements to
be met by a person to open a securities
account of a particular type are set out in the
Terms and Conditions of NSD’s Depository
Operations.
A client may open several securities accounts
of the same type with NSD.
TRADE REPOSITORY
SERVICE FOR OTC
DERIVATIVES
In accordance with the decision made by
G20 representatives at the Pittsburg Summit
in 2009 and with the current legislation,
market participants are required to provide
information on OTC repo and derivative
trades (and other transactions) concluded
on the terms of master agreements to trade
repositories.
In keeping with these commitments, NSD
became the first organization to introduce a
trade repository service to the Russian market
during 2013 and, by law, market participants
have been required to report all OTC repo
and FX swap contracts to TR since November
05, 2013. Starting October 01, 2015 Russian
market participants are obliged to report all
derivative trades to a trade repository, as well
as mark to market valuation and collateral
data. As of December 31, 2015, NSD’s Trade
Repository serves more than 1,100 clients,
including banks, brokers, dealers, asset
management and insurance companies,
non-professional participants of the securities
market.
Currently, there are two trade repositories in
Russia, but majority of trade data is reported
to NSD’s Trade Repository, which was
recognized in September 2014 by the Bank
of Russia as a systemically important trade
repository on the Russian market.
Unless otherwise provided for by the relevant
Securities Account Agreement, the number
of securities accounts that may be opened
for a client under the same Agreement is
unlimited.
There is no fee charged for the opening of
the account. Fee for the maintenance is
charged according to corresponding tariff of
the custody services of NSD.
For more information please contact Client
Support Departments: https://www.nsd.ru/
en/about/contacts/#client.
On the basis of experience from early months
of TR operation, current efforts are being
made to standardise and simplify the range of
data fields that trading parties must report to
the TR. OTC derivatives are often specialised,
highly bespoke instruments and this can
present problems for reporting parties
in capturing key contract details within a
standardised message format and ensuring
that fields are correctly matched and
reconciled. The Bank of Russia is currently
reviewing reporting requirements with a view
to streamlining required message fields and
matching procedures.
For additional information about NSD, please
visit www.nsd.ru.
22
05
REGULATORY BODIES
AND LEGAL FRAMEWORK
OF THE RUSSIAN
SECURITIES MARKET
REGULATORY
LEGISLATION
Securities Regulation of the Russian
securities market is based on laws which
determine general rules governing the
functioning of the Russian securities market
and the subordinate laws that set special
standards:

The Civil Code of the Russian Federation.

The Federal Law “On securities market”,
No. 39-FZ of April 22, 1996.

The Federal Law “On Joint stock
companies”, No. 208-FZ
of December 26, 1995.

The Federal Law “On protection
of rights and interests of investors
in the securities market”, No. 46-FZ
of February 18, 1999.

The Federal Law “On banks and banking
activity”, No. 395-1 of December 02,
1990.
The Federal Law “On countering the
legalization of illegal earnings (money
laundering) and the financing of
terrorism”, No. 115-FZ of August 7, 2001.
the Register of Owners of Registered
Securities”, Regulation No. 09-33
of August 13, 2009.
CENTRAL BANK
OF THE RUSSIAN FEDERATION

FSFM Regulation “On Qualified
Investors”, Regulation No. 27
of October 02, 1997.

Bank of Russia Ordinance
No. 3253-U, dated 30 April 2014
“On the procedure for maintaining the
register of contracts concluded on
terms of a master agreement (single
agreement), timeframes for providing
information necessary for maintaining
the said register and information from
the said register, and submitting the
register of contract concluded on
terms of a master agreement (single
agreement) to the Central Bank of the
Russian Federation (Bank of Russia).
The primary goal of the Bank of Russia is to
ensure price stability, which implies achieving
and maintaining steady and low rates of
growth in consumer prices. To accomplish
the main goal, the Bank of Russia is assigned
with the following tasks:

In cooperation with the Russian
Federation Government Bank of Russia
elaborates and peruses the uniform
monetary policy that affects the
securities market. One of the means
of monetary policy realization is the
Bank of Russia bonds issuing;

Promotion of the stability of financial
system;

As a Ministry of Finance of the Russian
Federation agent, Bank of Russia
provides the placement, attendance and
redemption of government securities;

Ensuring the functioning of payment
systems;

Implementation of foreign exchange
regulation and foreign exchange control;

Regulation, control and supervision
of the financial market and financial
institutions and also other parties,
within its competence;
REGULATORY BODIES
The regulatory structure of Russian securities
market consists of the Governmental
Authorities and the Self-Regulated
Organizations.

The Federal Law “On Competition”,
No. 135-FZ of July 26, 2006.
The following government authorities are
involved in the Russian securities market:

The Federal Law “On the Central
Depository” No. 414-FZ of December 7,
2011.

Central Bank of the Russian Federation
(Bank of Russia);

Ministry of Finance of the Russian
Federation (The Russian Finance
Ministry);
Ensuring a due level of protection
of the rights and legitimate interests
of consumers of financial services;

Federal Antimonopoly Service
of the Russian Federation (FAS).
Carrying out statistics activities in the
area of monetary statistics and external
sector statistics.

FSFM Regulation “On Depository
Activity”, Regulation No. 36
of October 16, 1997.
FSFM Regulation “On Maintaining
MAIN FUNCTIONS OF THE BANK OF RUSSIA ON THE RUSSIAN SECURITIES MARKET
ISSUERS
PROFESSIONAL
PARTICIPANTS
COLLECTIVE
INVESTMENTS

Development of securities issues’ standards
Registration of issues
Registration of issue reports
Registration of issue prospectuses (except for governmental, sub-federal, banks’ and municipal
securities)
Suspension of issue process in case of any violation of law
Development of IPO procedures and rules for circulation of securities outside of the Russian Federation
Audit of issuers

Development of the legal basis of professional activities
Setting capital requirements for market participants
Issue of licenses of professional market participants
Audits of professional participants
Suspension or cancelation of licenses in case of violation of law

Issue of licenses of investment funds, private pension funds, asset managing companies, specialized
registrars and depositories
Registration of asset management rules
Setting the requirements to the structure of the assets of investment funds
Setting the procedure for NAV calculation

INVESTORS

Protection of rights and legitimate interests of shareholders and investors in financial markets, insurers,
insured persons and beneficiaries, established in accordance with the insurance legislation, as well as
insured persons for mandatory pension insurance, investors and participants of a private pension fund
for nonstate pension provision
Monitoring the compliance with legislation of the Russian Federation on combating illegal use of
insider information and market manipulation
25
MINISTRY OF FINANCE
OF THE RUSSIAN FEDERATION
The Russian Finance Ministry is responsible
for strategic issues regarding the
development of the financial market, and the
preparation of draft laws and government
decrees.
The Russian Finance Ministry determines
the procedure for the issuing of federal
government securities and is responsible
for registering government, municipal
and regional bonds, and bonds issued by
insurance companies. Minfin also prepares
the regulations on minimum capital
requirements for market participants and
their asset structures, with the participation
of the Bank of Russia.
FEDERAL ANTIMONOPOLY SERVICE
OF THE RUSSIAN FEDERATION
The main goal of FAS is to secure
competition, restrict monopolistic activities
and to protect consumer’s rights on the
Russian market.
In order to pursue its goals, Federal
Antimonopoly Service:

Enforces advertising legislation;

Oversights foreign investors activities
in strategic enterprises (see sections
“Restrictions on foreign investment”);

Enforces anti-monopoly legislation on
natural monopolies in transportation
and energy sectors;

Oversights M&A deals.
SELF-REGULATED ORGANIZATIONS
Self-regulated organizations (SRO) are nongovernmental organizations, founded by
the professional participants of the Russian
securities market. They establish rules
and standards that are mandatory for the
members in order to protect their interests.
There are currently (2015) seven major
self-regulated organizations on the Russian
securities market:

26
Russian National Association of
Securities Market Participants (NAUFOR).
Number of participants: 320, web-site:
www.naufor.org/default.eng.asp;
Not-for-profit partnership “National
League of Management Companies”
(NLMC). Number of participants: 106,
web-site: www.nlu.ru;
National Securities Market Association
(NSMA).
Number of participants: 230, web-site:
www.nfa.ru/?page=english;

Professional Associations of Registrars,
Transfer Agents and Depositories
(PARTAD). Number of participants: 64,
web-site: http://partad.ru/;

Ural Region Non-Profit Professional
Securities Market Participant Partnership
(URPSMP). Number of participants: 16, web-site: www.uralprofi.ru;

Self-regulatory organization Non-profit
partnership “National Associations
of Non-State Pension Funds” (NAPF).
Number of participants: 72, web-site:
www.napf.ru;
Non-profit partnership “Assosiation
of Professional Managers of Financial
Market”. Number of participants: 7,
web-site: www.opufr.ru.
The Russian National Association
of Securities Market Participants
(NAUFOR) brings together brokers, dealers,
depositories and asset managers. The
Assosiation was established in 1996. NAUFOR
sets the rules and standards for members
with regard to virtually every aspect of the
securities business, and strives to support the
regulatory work of the federal regulators and
legislators.
The National League of Management
Companies (NLMC) is a self-regulatory
organization composed of professional
securities market participants who manage
investment funds, unit investment funds
and pension reserves. It was established in
1996 as a non-profit partnership. Current
activities of NLMC include the legislation
development and improving the regulation
governing the management of investment
funds, unit investment funds and nongovernment pension funds or other forms
of collective investment; developing the
rules and standards of asset management,
control over their execution; control
over the execution of the legislation of
the Russian Federation concerning the
protection of rights and legitimate interests
of the clients; representing the interests
of management companies of investment
funds, unit investment funds and nongovernment pension funds in the process
of communication with the government
authorities and regulatory bodies and third
parties; advanced training for the officials and
the staff of the member organizations
of NLMC.
The National Securities Market
Association (NSMA) is a leading
organization of professional participants
of the Russian securities market. It was
established in January 1996. The NSMA is an
associate member and represents Russian
participants of the securities market in the
International Capital Market Association
(ICMA) and in the European Financial Markets
Federation (EFMF). The NSMA is a trade
association operating on a self-regulatory
basis. Its mission is to facilitate economic
growth in Russia by making the most of the
securities market potential in order to provide
advantageous conditions for its participants,
primarily NSMA members, as well as other
operators and investors of the financial
market.
The Professional Association
of Registrars, Transfer Agents and
Depositories (PARTAD) was established in
1994 and given the status of a self-regulated
organization in 1997. It brings together
depositories,registrars and specialized
depositories.
Self-Regulatory Organization “Ural
Region Non-Profit Partnership of
Professional Securities Market
Participants” (URPSMP) was established
on November 20, 2003 on the basis of the
Ural Association of Financial Brokers and
Dealers. Key tasks of “Non-Profit Partnership
of Professional Securities Market Participants
of the Ural Region” include developing and
maintaining high standards of corporate
conduct on the securities market; creating
a self-regulation system on the securities
market; interaction with government bodies
regulating the activities of the securities
market participants; creating favorable
conditions for the securities market
development, increasing the investment
appeal of the Urals Federal District.
The National Association of Non-State
Pension Funds (NAPF) was established in
order to create favorable conditions for the
Partnership members’ activities, to protect
the interests of the Partnership members,
depositors, participants and insured parties,
to establish the rules and performance
standards ensuring operational efficiency
of the Partnership members. The Association
was established in March 2000. Starting
from May 27, 2004 NAPF is a self-regulatory
organization – the only self-regulatory
organization of non-government pension
funds in Russia.
RESTRICTIONS
ON FOREIGN
INVESTMENT
GENERAL
Most types of investments in Russia’s
financial market are freely available to foreign
investors.
The activity of foreign investors is regulated
by the Federal law “On Foreign Investments
in the Russian Federation”, which sets out the
general guarantees of the rights of foreign
investors with regards to investments and
receiving income.
Under this law, all types of investors,
whenever individuals or entities, both foreign
and local, must secure the approval of the
Federal Antimonopoly Service (FAS) if they
are going to acquire over 25% of the voting
equity of a Russian company.
There are also several limitations with
regard to acquiring enough shares to have
a vote, when investing in banks, insurance
companies and strategic enterprises set out
in the Russian laws and acts issued by other
government authorities.
It should be taken into consideration that
if a foreign investor is operating on the
Russian securities market via an omnibus
account holder (a nominee holder), the
investor and the issuer of securities are
responsible for monitoring thresholds for
ownership of securities in accordance with
the applicable legislation of the Russian
Federation. Nominee holders are responsible
for disclosing the owners of the securities
at the issuer’s request, but they are not
responsible for reporting on the thresholds of
their clients.
INSURANCE COMPANIES
Insurance companies which are affiliated
with the foreign investors, or in which foreign
investors have stake in their authorized
capital of over 49%, are not allowed to
engage in private insurance, compulsory
insurance, compulsory state insurance,
insurance of property bound with delivery
or performance of contractual work for the
needs of the state, or property insurance for
state and municipal organization.
If the quota of 50% foreign capital in the total
authorized capital of insurance organizations
is exceeded, the Bank of Russia stops
licensing the insurance activities of insurance
companies affiliated to foreign investors.

The Bank of Russia must be notified
when local or foreign investor purchases
1% of the bank’s shares;
Information disclosure and the standards in
place, are established by the Federal Laws
“On Securities Markets”, “On Joint-Stock
Companies” and by several regulations
on information disclosure applied to the
securities issuers .
In accordance with the clause 30 of the
Federal Law “On securities Market”, disclosure
means ”making the information accessible
to all persons concerned, regardless of the
purposes of receiving such information,
as part of a procedure that guarantees its
discovery and receipt”.
Permission must be obtained from the Bank
of Russia in order for the insurance company
to upsize their authorized capital by the
means of foreign investors or their affiliated
companies and both by insurance companies
and Russian shareholders to sell insurance
organization’s shares to non-residents. If
the quota of 50% foreign capital in the total
authorized capital of insurance organizations
is exceeded, the Bank of Russia bans the deal.
Disclosure is based on several principles:
STRATEGIC ENTERPRISES
A Strategic enterprise is a Russian company
engaged in one of the activities of strategic
importance for national defense and security
defined in the Federal Law “On the Procedure
of Foreign Investment in Businesses with
Strategic Importance for the Defense of the
Country and the Security of the State”, which
came into force in May 2008 and includes
42 fields. The aim of this Law is to prevent
foreign investors taking control over strategic
companies.
Due to this law, the prior approval of the
Russian Government is required:
BANKS
Investment in the banking sector is regulated
by the Federal Law “On Banks and Banking
Activity”, which establishes that:
INFORMATION
DISCLOSURE

Frequency and immediacy of disclosure;

Accessibility of the information disclosed
to the majority of shareholders and
other interested parties;

Veracity and completeness of content;

The information should be neutral and
show no preference for any particular
group of recipients over another;

A balance should be maintened between
the transparency of the company and
commercially classified information.
Information that is disclosed may take
one of the following forms:

An annual report;

An annual/quarterly business
accounting report;

A quarterly report;

A list of affiliated persons;

A decision/report on issue;

An issue prospectus;

A report on the substantial facts.
For foreign private investors:
Information may be disclosed by:

In order to obtain more than 50%
of shares in authorized capital in
strategic enterprise;

Publications in the mass-media, on the
internet, on the newswire;

In order to obtain more than 25%
of shares in a company involved in the
development of a strategic natural
resource;
Sending the information to the relevant
governmental authorities;

Sending the information to the issuer’s
shareholders and to the professional
market participants;

Accessing the data at the issuer’s office.
Prior approval of the Bank of Russia is
requitred in order to purchase 10% or
more of bank’s shares;

For foreign governments or international
organizations;

A quota is set by the Federal law for
licensing banks with foreign capital;

The aforementioned quota is calculated
as the ratio of the total capital owned by
a non-resident in the authorized capital
of banks with foreign investments, plus
the capital of foreign banks’ subsidiaries,
compared to the total authorized
capital of credit institutions registered
in the Russian Federation. If the quota
is completed, the Bank of Russia stops
issuing licenses to banks with foreign
capital
In order to obtain more than 25%
of shares in authorized capital in
strategic enterprise;

In order to obtain more than 5%
of shares in a company involved in
the developing of a strategic natural
resource.
27
06
National Settlement Depository (NSD), acting as Central Securities Depository, is a link between various market participants, both domestic
and foreign, thus ensuring the system’s stability and its further development. The following chart shows the market infrastructure following the
coming into force of the Federal law “On Central Securities Depository”.
MARKET STRUCTURE AFTER THE CREATION OF THE CSD
Moscow Exchange
Nominee
holder
accounts
Opens nominee holder accounts
Foreign Central
Securities Depositories
Issuers
SAFEKEEPING
AND SETTLEMENT
Transactions are made by using nominee accounts
in registrars opened by NSD.
Market members can now execute any number of
operations without disturbing registrars accounts
Emission
of bonds
Emission
of shares
Foreign Custodians
Registrars
Brokers
Custodians
Asset managers
Dealers
Using proxy
custodians If have no
depository license
Able to open nominee
holders accounts
Able to open trustee
accounts
Able to open only
owners accounts
Can also settle
transactions
between their clients
not using NSD
Infrastructure
International Central Securities Depositories
(ICSDs) / local Central Securities Depositories
(CSDs) can open nominee holder accounts in
NSD. List of such ICSDs / CSDs is set by order
Investors
Can open owners accounts or transfer
securities or funds to asset managers
of FFMS. In accordance with the Federal law
on CSD, it is also possible for foreign entities
to open owner accounts directly in NSD. As
for foreign custodians, it is possible for latter
to open nominee holder accounts in Russian
custodians.
You may see the summary of the account types, available for investors in the table below:
ACCOUNT TYPES OF CSD
REGISTRARS
Owner, CSD, nominee for non-CSD securities
CUSTODIANS
Owner, nominee (omnibus, segregated), foreign nominee*
NSD (CSD)
Owner, nominee (omnibus, segregated), foreign nominee**
* For foreign custodians; ** For foreign CSDs and ICSDs
NSD introduced short alieses which
can optionally be used instead of long
safekeeping account and sub-accounts
numbers.
For convenience, operations with securities
can be split in two groups:

Stock exchange deals on the Moscow
Exchange;

OTC deals which can be divided into two
types: FOP and DVP.
FOP settlements will remain highly demanded
operations on the market due to their
simplicity and are provided by all custodians.
New York. Settlement of DVP-1 model is
possible via cash account with the Bank of
Russia (DVP via RTGS).
As for DVP settlements, NSD provides the full
range of services, including settlement with
DVP-1, 2, 3 options. Settlement of DVP-1, 2, 3
models is possible via cash accounts opened
with NSD (in RUB, USD, EUR, CNY, HKD, GBP,
CHF) and cash accounts opened with the
foreign banks (in USD): Citibank, N.A., New
York, JP Morgan Chase Bank N.A., New York
and Deutsche Bank Trust Company Americas,
Other depositories, depending on the level of
their infrastructure and client base, retain the
ability to settle DVP and FOP deals internally,
but due to limited amount of their own
clients and technological development levels,
it is expected that most of the operations will
be settled inside NSD.
29
07
CASH CLEARING
Russia’s main cash clearing system is
maintained by the Bank of Russia, It is divided
in two major subsystems:

Batch payment system;

Real-time gross settlement system
(RTGS).
BATCH PAYMENT SYSTEM
There are certain principles that lie
at the heart of mass payments by
the Bank of Russia:

Settlements are paid simultaneously
for a number of documents (batching
procedure), managing the possibility of
netting of instructions;

Settlements are paid during the regular
session of the payment system of the
Bank of Russia’s payment system, at the
periods of time stipulated, several times
a day.
All Russian credit institutions are
participants in the Bank of Russia’s
payment system (almost 1,000 credit
institutions registered on the territory
of the Russian Federation, as of August
2016);
PROCESSING SCHEDULE
RECEIPT OF ELECTRONIC
DOCUMENTS
PROCESSING OF ELECTRONIC
DOCUMENTS
REPORTING OF PROCESSING
RESULTS
FIRST SESSION
From 10.00 to 11.00
From 11.00 to 12.00*
From 12.00
SECOND SESSION
From 11.15 to 14.00
From 14.00 to 15.00*
From 15.00
THIRD SESSION
From 14.15 to 16.00
From 16.00 to 17.00*
From 17.00
FOURTH SESSION
From 16.15 to 18.00
From 18.00 to 20.00*
From 20.00
FINAL SESSION
From 19.00 to 21.00
From 21.00 to 22.00*
From 22.00
SESSION NUMBER
* approximate indicative time
THE BANKING ELECTRONIC SPEEDY
PAYMENT SYSTEM (RTGS)
The RTGS (known as the BESP) is a national
real-time settlement system, which operates
on a gross basis. One of the main objectives
of the Central Bank of Russia in order to serve
the Payment System is to ensure the proper
RTGS functioning and the development of
the settlement mechanisms.
This system began operations on October
21, 2007 – it was then that payments began
to be made on a regular basis. At the same
time, settlement of trades on the Moscow
exchange was transferred to the RTGS system
in 2010.
RTGS system is available for operation from
7.00 till 21.00.
The payment technologies are continuously
developed in order to meet certain
international standards. The formats for
settlement documents are being improved
and now compatible with international SWIFT
standards.
The share of RTGS transactions on the market
is growing steadily. For the time being all
Russian credit institutions are participants of
this system.
31
The following corporate actions are the most
common on the Russian market:
08
CORPORATE ACTIONS
AND TAXATION
MANDATORY CORPORATE ACTIONS
of shareholders entitled to participate in the
meeting and take part in other corporate
actions approved at that meeting). In order
to collect the full list of final shareholders,
the registrar sent a relevant request to the
custodians registered in the register, and the
custodians and sub-custodians disclosed the
securities’ owners in chain order.

Cash Dividend (DVCA);

Stock Dividend (DVSE);

Liquidation Dividend (LIQU);

Interest payment (INTR);

Partial Redemption (PRED);

Full Call/Early Redemption (MCAL);

Final Maturity (REDM);

Bonus Issue (BONU);

Conversion (CONV);

Stock Split (SPLF);

Reverse stock split (SPLR);

Spin-off (SOFF);

Decrease In Value (DECR);
The other options to vote at the meeting
for the owner are the following:

Increase in Value (INCR);

Merger (MRGR);

Attending the meeting in person;

Pari-passu (PARI);

Sending the voting paper to the issuer;

Exchange (EXOF);

Worthless (WRTH).
Voting online via dedicated online
platform (E-voting) – this technology is
currently being developed at NSD.
VOLUNTARY CORPORATE ACTIONS

General Meeting / Extraordinary
Meeting (MEET, XMET);

Bond Holder Meeting (BMET);

Priority issue (PRIO);

Put Redemption (BPUT);

Tender / Purchase Offer (TEND);

Repurchase Offer (BIDS).
Russia is a Record date driven market. There
is no ex-date concept and the owner of
securities, entitled for a corporate action,
is determined on the record date. Market
claims are settled on the basis of bilateral
agreement.
GENERAL MEETINGS
AND DIVIDEND PAYMENTS
One of the most important corporate actions
is the General Meeting of Shareholders. It is
conducted at least once a year (the Annual
General Meeting) between March and June
(for Stock Companies) and between March
and April (for Limited Liability Companies).
The record date, agenda and meeting date
are determined by the company’s Board (or
by any other authorized by the statutory
documents body). It is also possible to call for
an Extraordinary General Meeting at any time,
if required.
For the meetings initiated before 1 July 2016
the issuer requested from the registrar a list

Since July 1, 2016 with the Federal Law No.
210-FZ coming into force, the issuer is no
longer required to collect the shareholders’
list. After the issuer announces the meeting
and sends meeting agenda and bulletin,
the custodians may send to NSD meeting
instructions containing owners’ identification
details and their voting instructions in ISO
format.
Dividends are approved by the General
Meeting and are paid in 10 days from the
record date to nominee holders or in 25 days
from the record date to other holders, who
are entered into the register. Record date is
approved by the General Meeting and falls in
the period from 10 to 20 calendar days after
the Meeting date. Dividend payment is made
through nominee chain by cascade (each
custodian is responsible to pass the payment
to the accounts of its clients). Russian
custodians are tax agents for non-residends,
foreign nominees, residents and individuals.
CORPORATE ACTIONS REFORM
An important component of NSD’s current
development agenda is to facilitate the
implementation of the Corporate Actions
Reform in the Russian market. Existing
procedures have given rise to a range of
inefficiencies and costs when measured
against international standards and a farreaching plan of action has been devised to
address these shortcomings.
Federal Law No. 210-FZ made a number
of important amendments to the Federal
Laws “On Joint Stock Companies”, “On the
Securities Market”, and “On the Central
Securities Depository” which came into force
on July 1, 2016. The Reform so far primarily
addressed the following:

introduced a new procedure for
exercising securities holders' rights in
the course of corporate actions listed
below on an automatic basis using the
EDI system of NSD and SWIFT:

Preemptive Right to Purchase
Shares (PRIO);

Share repurchase by issuer (BIDS);

Share repurchase on holder’s claim
(BIDS);

Mandatory/voluntary offer to
purchase (TEND);

Redemption/retirement of
securities by a shareholder, who
owns more than 95% of shares
(TEND);

Meetings of securities holders
(MEET/XMET/OMET/BMET);

adding items to the agenda of
general meetings of the securities
owners;

nominating candidates to executive
and other bodies of the issuer;

requesting to convene or conduct
an Extraordinary General Meeting.

authorised the CSD to determine the EDI
formats to be used for the purpose of
exercising rights attached to securities;
introduced new methods of
participation in General Meetings of
securities holders, such as e-proxy
voting through a securities depository
and e-voting on a website.
The Reform also sets a goal to create an
authorized Corporate Information Centre
on the basis of NSD. This will oblige
securities issuers to inform NSD on all
forthcoming material events and corporate
actions electronically using ISO 20022
message format, thus avoiding paperflow in
accordance with international standards. To
facilitate timely communication of accurate
corporate actions data, NSD will serve as
a golden source of information for each
corporate event, thereby minimising the need
for sub-custodians or other intermediaries to
collect corporate information from multiple
sources and to reconcile any discrepancies in
information that may be found across these
sources .
NSD focuses on building the following target
interaction model as a result of the Reform.
For more information about Corporate
Actions Reform, please visit
http://www.corpactions.ru/en/.
changed the procedure for preparing
lists of securities holders;
33
NSD FOCUSES ON BUILDING BELOW TARGET MODEL AS A RESULT OF NSD PROJECTS ON CORPORATION ACTIONS
Issuers
Registrars
WEB ACCOUNT
EDI NSD
ISO 20022
ISO 20022
ISO 20022
NSD WEBSITE
WEB ACCOUNT
ISO 15022
SWIFT
ISO 20022
EDI NSD
NSD clients
TAXATION
Under the Russian Tax Code, NSD acts as a
withholding agent when paying out income
on Russian securities.
In the cases provided by law, NSD calculates,
withholds and pays to the budget of the
Russian Federation corporate or personal
income tax in accordance with the provisions
of the Russian Tax Code and double taxation
treaties of the Russian Federation.
As a securities depository, NSD acts as a
withholding agent when paying out income
34
on securities to foreign organizations or
foreign nominees, as well as when paying out
dividend income to Russian organizations on
shares held on owner securities accounts.
securities kept on owner securities accounts
could provide the withholding agent (NSD)
the appropriate documents providing the
mentioned right.
Foreign nominees are required to submit to
NSD a summary tax disclosure statement,
without the need to submit any documents
certifying the right of actual income
recipients (beneficial owners/beneficiaries) to
enjoy tax exemptions or benefits.
Standard tax rates may be reduced in
accordance with the double taxation
avoidance agreements, which are currently in
place with 80 countries.
Russian and foreign organizations which
are actual beneficiaries of income and have
the right for tax exemptions and reliefs on
For more information about taxation
procedures and tax rates please refer to our
website: http://www.nsd.ru/en/services/
withholding_agent/.
09
INFORMATION
SERVICES
The modern securities market puts forward
a number of information requirements.
Among them are the relevance, reliability and
good structure of information. An extensive
experience and high potential of the Moscow
Exchange Group employees allows to create
products meeting these requirements.
The Training Data
IR SERVICES

REFERENCE DATA
Reference and additional data from the
trading system on trading modes, listing,
risk parameters, etc., presented in the
convenient form;

Customized data feed with additional
calculation indicators: expansion of
the range of information products
transmitted in the real time mode, the
lightweight premium speedy data flows
and feeds with additional analytical
indicators.
Real Time Streaming Data

EQUITIES – trading in equities, fund
units and depositary receipts
on the MOEX Group markets;

Bonds – trading in bonds
on the MOEX Group markets;

CURRENCIES – trading in foreign
currencies at the MOEX;

FUTURES AND OPTIONS – trading
in standard contracts at the MOEX;

MARKETS OF THE ETS – trading
on all the Eurasian Trade System
Commodity Exchange markets
(Kazakhstan);

THE MOSCOW EXCHANGE (by
request) – implies providing the
real time Market Data for a certain
instrument traded on any Moscow
Exchange Group market at
a specific time including
information on best bid/ask.
Trading Results
(End-of-Day History)
Trading results from all markets (trading
floors) of the MOEX Group (daily updates
or archives for the past periods prior to
the start date of subscription).
New information and analytical products
based on the analysis of stock exchange
information with the use of statistical analysis
and machine learning methods.
In order to increase transparency and
promote the domestic equity market
as a center of price discovery for securities
of Russian companies, the Moscow Exchange
introduced Foreign Fund Flows indicator.
The Indicator represents the difference
between total value of buy trades and
total value of sell trades of non-residents
for the period on the MOEX Equity Market,
including on-exchange main trading mode
and negotiated trading mode. The indicator
includes trades of non-resident clients
and dealer (proprietary) trades of Russian
subsidiaries of global banks and brokers.

GM&Dividends – detailed historical
and daily data on general shareholders
meetings’ convening and results, as well
as on payment of dividends on all shares
traded on the Moscow Exchange PJSC
and on all NSD-eligible shares of Russian
issuers;

Modular database – information about
financial instruments’ parameters and
corporate actions on shares and bonds;
it includes the following modules:
Organizations, Bonds, Shares, UIT
Units, Depositary Receipts, Mortgage
Participation Certificates, CA Bonds, CA
Shares;

Report on change in data on foreign
securities and their international codes –
a service allowing to control changes
and updates of information about
international codes of foreign financial
instruments;

Information for reports on the form
0409711 “Report on securities” contains
newest data on securities and their
issuers allowing to file a report based on
the 0409711 form;

Report “Admission to trading”–
information about admission of
securities to trading on the Moscow
Exchange PJSC, change in the listing
level, trading suspension/resuming; it
contains basic information on securities
and issuers;

NSD DISC – information on securities
serviced by NSD and organizations
associated with these securities (issuers,
registrars, and authorized depositories),
corporate action calendars and events in
the organizations, announcements;

Emissive Library – provision of scanned
and hard copies of issuance documents
on bonds with mandatory centralized
custody at NSD authenticated by the
NSD’s seal;

Distribution of information to securities
holders – distribution of notices related
to non-mandatory corporate actions
and other information of interest to NSD
clients;

NSD Valuation Center – calculation
of fair values of financial instruments
serviced by NSD on the basis of the
method developed by NSMA SRO
under the support of the Bank of Russia,
Moscow Exchange PJSC and market
participants.
Two types of subscriptions are available:

Free monthly subscription for MOEX
equities market: FFF report;

Paid subscription for per instrument data
on more frequent intervals.
Source: http://moex.com/s1958.
NSD
Range of information services, provided by
NSD, allows to market participants to get
authentic information and gives opportunity
of individual tuning of structure necessary
information.

Provision of a written response to a
request about one (all) market or one
instrument, over one month (year).
The Market Data (direct access) to be
used in of non-display systems and
generation of the Derived Data intended
for onward public distribution and usage.
Information products for Investor
Relations (IR) of issuers allowing to
estimate liquidity (exchange and
off-exchange), to identify key groups
of investors that form a price in the
secondary market, to assess purchases /
sales of non-residents (by geographical
areas) and the efficiency of IR events, to
choose brokers and bookrunners.
VALUE ADDED ANALYTICAL PRODUCTS
Archive Data
The Market Data
SIR Defaults contains newest
information about defaults and technical
defaults on Russian and foreign issuers’
bonds with mandatory centralized
custody at NSD;
Training Data on trades at Stock,
Currency (FX) and Derivative markets.
MOEX

SIR NSD is a database which contains
information about issuers and their
securities; it includes a corporate action
calendar; the database is presented
in a well-structured form, it provides
information on a regular basis and can
be integrated into users’ systems;
SIR Offers represents newest
information about offers to repurchase
and repay Russian and foreign issuers’
bonds with mandatory centralized
custody at NSD;
Source:
https://www.nsd.ru/ru/db/lists/all_sec/.
37
10
COMMUNICATION
STANDARDS
AND CONNECTIVIT Y
The following communication methods are
generally used between market participants
and their clients on the Russian market:

Paper forms – still widely used by the
registrars and custodians (during their
communication with private investors).
Supported by all market participants as
a back-up.

Electronic documentation – all major
market participants support this
communication method, however there
is no common standard for electronic
communications and every market
participant runs his own versions of the
EDI system.

SWIFT communication – all major
market custodians on the market also
support SWIFT communication. SWIFT
is widely used for communication with
foreign clients and between big local
players.
SWIFT is still not a common standard
on the market, however NSD and other
major market participants are working on
popularizing and facilitating the SWIFT
communications. The Russian National
SWIFT Association (ROSSWIFT) was created
to fulfill this task. It join together all SWIFT
shareholders and users within the nation.
ROSSWIFT was established and registered
in 1995 in accordance with the Russian
Federation legal requirements as a nongovernmental non-commercial organization
(association). Currently ROSSWIFT represents
about 600 SWIFT users over the country
including all members, sub-members and
participants of SWIFT from 85 cities in Russia
from 9 time zones. More than 50% of banks
carrying 80% of payments are represented in
SWIFT. Russia has second place after USA on
the number of SWIFT users. Sberbank is the
biggest SWIFT user in Russia and among 100
top users of SWIFT traffic in the world.
The main role of ROSSWIFT is to promote
collaboration and cooperation in the Russian
SWIFT Community and to form policy and
lobby on matters of common interest.
Association seeks to support the Russian
SWIFT Community by identifying and
researching current and emerging issues and
setting Russian strategy for SWIFT.
On 11 June 2015, Eddie Astanin, Chairman of
the Executive Board of National Settlement
Depository (NSD), Russia’s central securities
depository, has been elected to the Board of
Directors of the international SWIFT system. This is the first time that a candidate from
Russia has joined the Board of SWIFT. The National Securities Market Practice Group
(NSMPG) in Russian Federation was created in
November, 1999. Representatives of Russian
NSMPG work in international Securities
Market Practice group (SMPG) for Corporate
Actions and Settlement and Reconciliation
to develop common requirements and
concrete recommendations on creation and
using SWIFT messages on the basis of the
standards ISO 15022 and ISO 20022.
There are two ways to connect to SWIFT for
Russian market participants: either individual
connection (which is convenient for players
with significant volumes of operations) or
collective connection (which is more suitable
for smaller market participants).
National Settlement Depository (NSD)
provide services to Russian financial
organizations connecting them to SWIFT
through Shared Connection scheme and
managing their SWIFT connections, as it holds
all necessary licenses for providing these
types of services. To date, approximately
70 Russia's and CIS countries' companies
are connected to SWIFT by means of the
simplified connection via NSD.
MEMBERSHIP. LIVE USERS – 2015
COUNTRY
WEIGHT OF RU
IN SWIFT TOTAL
TOTAL LIVE USERS
11,090
Russia
In SWIFT Total
In Europe, Middle East & Africa
515
4,6%
7,6%
FIN TRAFFIC BY REGION – 2015
TRAFFIC SENT YTD
TRAFFIC RECEIVED YTD
REGION
SHARE VS ALL REGIONS
AMERICAS
20.8%
23.8%
ASIA PACIFIC
13.5%
11.9%
65.6% (1.2%)
64.52% (1.1%)
EUROPE, MIDDLE EAST & AFRICA
(INCL. RUSSIA)
Source: ROSSWIFT
39
2015
11
JANUARY
Thomas Murray Data Services affirmed NSD’s rating at AA–, Stable outlook.
NSDirect, the upgraded Web Office, was launched. Currently, it is available for electronic interactions during corporate actions; in future,
it will ensure an availability of other services based on the one stop shop principle.
FEBRUARY
NSD and the Independent Directors Association organized a conference “Corporate Actions Reform: Challenges and Practice” for market
participants.
A conversion payment service was launched; it integrates two operations (foreign currency sale & purchase and money transfer) into a single
operation. It reduces the number of instructions and payment documents submitted by clients.
NSD concluded a complex insurance agreement for 1 year term. The insurance cover sum was USD 65 million. The insurance policy covers all
NSD professional activities within the framework of its professional securities market participant’s licenses, including clearing and depository
activities along with provision of banking operations in accordance with the license for banking activities.
In response to the needs of global market players, Moscow Exchange has expanded its international presence and can immediately offer its
customers network connectivity in top financial centres using TMX Atrium's infrastructure.
MAIN EVENT CALENDAR
FOR 2015 AND 1H2016
MARCH
A special website devoted to the corporate actions reform was launched – corpactions.ru. It includes a detailed description of all aspects of
the reform: from legal changes and timeframe of the reform to the technological details and information. In January-March, there were 3,346
visits to the website (including 506 visits to the English version); 60 questions were asked.
NSD began providing to the clients an opportunity of DVP-1 settlements on securities using the Bank of Russia’s real time gross settlement
system (BESP). The focus group includes JSC Russian Agricultural Bank, JSC SMP Bank, LLC HCF Bank, JSC MDM Bank, LLC Morgan Stanley Bank
and JSC SEB Bank.
NSD tested its Disaster Recovery Plan (DRP) to ensure prompt switching and recovery of the systems providing money settlements
and the systems allowing to conduct depository operations.
Fitch Ratings affimed NCC’s rating at BBB, Negative outlook.
The Moscow Exchange has started trading in futures contracts on U.S. Dollar-Canadian Dollar and U.S. Dollar-Turkish Lira currency pairs.
The Moscow Exchange will begin a move from T0 to T+1 settlement cycle for Russian federal government bonds known as OFZs
from 23 March 2015.
The Moscow Exchange has started trading in a futures contract on the currency pair Chinese Renminbi – Russian rouble.
APRIL
Interacting with issuers, registrars and depositors, NSD will use international standards providing an exchange of structured standardized
messages in the electronic form in ISO formats and an opportunity of STP at all stages of document processing.
NSD and Interfax launched Reference United Data (RU DATA), an integrated system of the corporate information collection, verification and
distribution. The new product is a reference database which for the first time in the Russian market unified a full volume of the accessible
updated information and the record keeping system’s data on Russian issuers and their financial instruments. RU DATA also includes
information provided by the NSMA Valuation Center.
NSD held two tests of its Disaster Recovery Plan (DRP) in respect of the office IT systems and the SWIFT system (the planned test
and the extraordinary one).
Eddie Astanin and Maria Ivanova joined the Board of Directors of the National Securities Market Association.
IRC was the first registrar that connected its automated system to NSD’s EDI.
MAY
NSD implemented four new information modules based on the GoldenSource 360° EDM technological platform: Shares, Bonds, UIT units and
Organizations. An NSD’s client can receive information regarding all securities accepted for servicing by NSD, data on a certain list of issuers
of the client’s interest and on the client’s own securities portfolios on deposit with NSD.
Thomas Murray provided an independent assessment of NSD‘s level of observance of the CPMI-IOSCO Principles for Financial Market
Infrastructures. Of the 24 Principles, NSD “fully” observes 6, “broadly” observes 10, “partly” observes 2, and there are 6 Principles not
applicable to NSD's operations. There are no Principles that NSD does not observe.
Alexander Nazarov was appointed Director of NSD’s Research and Development Department.
JUNE
NSD and China Central Depository and Clearing Co., Ltd., China’s central securities depository servicing governmental securities, signed a
Memorandum of Understanding. The parties agreed to share experience and information, to develop cooperation in the sphere of depository
and settlement operations, operational interactions using corresponding accounts, corporate actions processing and information services.
Eddie Astanin was elected as Russia’s candidate for the Board of Directors of SWIFT.
Moscow Exchange has implemented a number of planned upgrades and new product roll-outs to the equity, bond and repo markets, thereby
expanding the range of facilities and opportunities available to its clients.
JULY
A launch of the new technology of conducting shareholder meetings which includes notifications about the meetings and e-proxy
voting in the international ISO formats (20022/15022). Major issuers, including Sberbank and Gazprom, used this service.
Technological availability has been achieved and testing has been completed to launch Bank of Russia’s forex repo.
Further improvements are under way.
41
The legislative framework for the corporate actions reform has been approved (Federal Law No. 210-FZ).
2016
The NSMA Valuation Center’s distributors network has brought together the resources of NSD, Moscow Exchange, Interfax, Cbonds,
and Thomson Reuters.
JANUARY
NSD has started using the KYC Registry to improve KYC procedures.
NSD won the J.P. Morgan’s Quality Recognition Award
From July 1, 2015, using LEI (Legal Entity Identifier) for reporting to Repository has been mandatory for professional market
participants and informing persons.
China Financial Futures Exchange (CFFEX) and Moscow Exchange (MOEX) today announce the signing of a Memorandum of Understanding
(MoU). The MoU aims to strengthen bilateral partnership and facilitate the development of both parties through information sharing,
reciprocal visits by senior executives, staff exchange and closer business cooperation in various areas.
Moscow Exchange will shut down trading on its Classica sector from 3 August 2015. Securities currently trading in the sector will be added
to the MOEX Board system of indicative quotations with their tickers resided in Bloomberg and Reuters.
NSD, registrars and depositories successfully carried out a full cycle of information and document interchange during purchase (repurchase)
of shares by a company upon shareholders’ request (BIDS), at general meetings of shareholders (MEET) and bond holders (BMET);
the interchange was held in a test regime with the use of EDI and telecommunications channels.
NSDirect, the upgraded Web Office, was launched. Currently, it is available for electronic interactions during corporate actions; in future, it will
ensure an availability of other services based on the one stop shop principle.
On 21st January 2016, the Federal Treasury introduced repo transactions with more than 1 day maturity.
NSD held a webinar “Specifics of cash and securities settlements. E-matching. New cash and settlement services”.
AUGUST
FEBRUARY
NSD has been recognized in Corporate & Financial Awards.
Moscow Exchange will launch “mini” MICEX Index futures with a smaller contract size and low initial margin requirements.
The contract will trade under the ticker MXI.
NSD concluded a one-year complex insurance agreement with the USD65 million insurance cover.
The Supervisory Board of NSD approved the Business Continuity Strategy, the Risk Management Development Strategy until 2020 and
approved the company’s risk appetite for 2016.
SEPTEMBER
NSD, together with the Russian Independent Directors Association, has arranged two corporate actions reform conferences
for market participants.
MARCH
NSD launched the new PVP settlement service designed to provide client cross-currency settlements.
NSD has implemented the back-to-back securities settlement technology.
Thomas Murray affirmed NSD’s rating at AA–, Stable Outlook.
Turkish CSD Merkezi Kayit Kurulusu A.S. (MKK) and two Indian CSDs: Central Depository Services Limited (CDSL) and National Securities
Depository Limited (NSDL) joined AECSD. Clearstream Banking and Russian spec. depositary “INFINITUM” were adopted as observers.
NSD and R.O.S.T. Registrar JSC concluded an agreement on the creation of the backup office based on NSD’s information systems for use in
emergency situations.
NSD have signed a memorandum of understanding with Serbia’s and Greece’s CSDs.
The XII International Conference of the Association of Eurasian Central Securities Depositories (AECSD) has been held.
APRIL
NSD signed an MoU with Egypt’s CSD.
From 4 September 2015 the National Bank of the Republic of Belarus has admit to trading on the Moscow Stock Exchange currency market.
Thomas Murray provided an independent third-party view of NSD's level of observance of the CPMI-IOSCO Principles
for Financial Market Infrastructures. The company’s level of observance improved.
OCTOBER
On 1 October 2015, mandatory reporting for all derivative trade types was launched, and the amended and restated Fee Schedule
for Repository Services took effect.
NSD successfully tested the e-voting prototype based on the blockchain technology.
First transactions with the use of PVP settlements were held.
PwC has conducted NSD’s operational audit (ISAE 3402 type II).
On 1 April 2016, as part of the Repository 2.0 project, all clients of the Repository were provided with free access to the Repository’s Web
Office and EDI File Gate.
A baseline version of the open-architecture CMS for inter-dealer transactions has been introduced.
A number of pilot transactions with a basket have been settled.
IRC was the first registrar that connected its automated system to NSD’s EDI.
NOVEMBER
The Bank of Russia amended the disclosure rules for DR holders. NSD’s experts were involved in the preparation of the amendments.
An e-voting platform project has been launched.
MAY
NSD has arranged a workshop for CSDs of the AECSD member countries.
The preparation to the Repository’s licensing began: it is planned to submit the respective documents to the Bank of Russia
in the end of Q3 2016.
Clearing session algorithms have been improved using advanced mathematical methods.
Market participants have been presented with a project to phase-out LUCH software in mid-2016 and move to the Web-client
and File Gateway.
JUNE
The Repository’s Fee Schedules were approved and published on 1 June 2016 (come into force since 01 July 2016).
The Bank of Russia accredited NCC as an operator of commodity supply.
On 27 June 2016, NSD introduced the new format of reports via Informing persons and voluntary reports on transactions concluded beyond
general agreements; market participants were provided with an access to special reporting forms for “technical” repo transactions and
currency swaps. The functionality for UTI generation on the basis of the Web Office was launched.
DECEMBER
NSD launched the electronic matching of all potential counter clearing and settlement instructions for OTC trades.
NSD held a number of seminars on the corporate actions reform for securities market participants.
The service of Russian Federal Treasury’s overnight repo transactions with an OFZ basket has been launched and demonstrates decent
growth rates. Trades have been made with a maturity of more than one day.
The Bank of Russia presented draft amendments to the Federal Law “On the Securities Market” aimed at regulating trade repositories’
operations. It is expected that the amendments will take effect in 2H2016.
As part of the SWIFT Service Bureau promotion, NSD held a webinar and presented its services of client connection to SWIFT services.
National Mercantile Exchange, part of Moscow Exchange Group, launched on-exchange trading in grain on 23 December 2015.
NCC Clearing Bank acts as the central counterparty. National Logistic Company will act as logistics provider, alongside surveyor companies.
Accredited elevators will provide grain storage solutions.
NSD launched DVP settlements in HKD on NSD accounts opened with Clearstream and Euroclear.
NSD has introduced new
11 information services:

42
Eddie Astanin won the Russia’s Financial Elite Award.
Bank of America to obtain clearing membership with Moscow Exchange's FX Market.
DURING THE YEAR:

BIS Assigns Highest Rating to Russia’s Financial Market Infrastructure; the 4th level rating (highest possible) alongside with FMIs of Germany,
France, Great Britain, Hong Kong, Singapore, etc.
Modules: Shares, Bonds,
Investment Units, Organizations,
Depositary Receipts, Mortgage
Participation Certificates,
Corporate Actions – Shares,
and Corporate Actions – Bonds;

Reporting for Generating Bank
of Russia’s Report Form 0409711
“Report on Securities”;

Report “Admission to Trading”;

“Report on Changes in Data
on Foreign Securities and Their
International Codes”.
JULY
On 19 July 2016, came into force the Bank of Russia’s Regulation No. 546-P document, which establishes a list of corporate information
submitted by issuers to National Settlement Depository (NSD), Russia’s central securities depository, and regulates the procedure
and deadlines for submitting the information
NSD has completed a scheduled and
an unscheduled testing of its Business
Continuity and Disaster Recovery Plan,
office IT systems, and SWIFT system.
43
12
RUSSIA’S
MACROECONOMIC
FRAMEWORK
2011
2012
2013
2014
2015
1H2016
Population, mln
142.9
143
143.7
143.7
146.3
146.5
GDP, USD bln
1,860
2,007
2,075
1,848.6
1,311
n/a
External debt/GDP, %
29
42.2
35.5
32.4
39.3
n/a
Public External debt /GDP, %
2.5
3.5
3.7
2.8
3.2
n/a
Private external debt/GDP, %
26.5
28.2
31.8
29.6
35.5
n/a
External debt/Export, %
104.6
120.5
138.9
120.4
151.4
n/a
Public External debt /Export,%
9.0
13.3
14.9
10.5
12.5%
n/a
Private external debt /Export, %
95.6
107.3
124.0
109.9
136.7%
n/a
Urals USD/bbl, average
109.5
110.0
107.9
99.4
53.7
37.9
GDP Growth
4.3
3.4
1.3
0.6
-3.7
n/a
Consumption
4.8
6.1
3.6
1.1
-7.5
n/a
Gross Domestic Saving
22.6
3.9
-7.3
-8
-18.7
n/a
Industrial Production
4.7
2.6
0.4
1.7
-3.4
0.4
Retail sales
7.2
5.9
3.8
2.7
-10.0
-5.7
Fixed capital investment
21
14
7
3
5
n/a
CPI
6.1
6.6
6.5
11.4
12.9
7.8
PPI
12.0
5.1
3.7
5.8
10.7
6.4
Budget in
20.3
20.5
19.5
20.3
17.9
n/a
Budget out
19.6
20.6
20.1
20.8
20.6
n/a
Surplus / Deficit
0.7
-0.1
-0.5
-0.5
-2.7
n/a
End-year
32.2
30.4
32.7
56.3
72.9
64.3
Average
29.4
31.1
31.8
38.6
61.3
70.1
Current account
97.3
71.3
33.4
57.5
69
16.4
Trade balance
196.9
192.3
180.3
189.7
145.0
n/a
Merchandise exports
515.4
528
523.3
497.7
340.3
n/a
Merchandise imports
318.6
335.7
343
308.0
194.1
n/a
Reserves, end-year
498.6
537.6
509.6
385.5
3,684
361.6
Total external debt, end-year
538.9
636.4
727.1
599.0
515.3
521.5
Public sector external debt
46.3
70.1
77.9
52.2
42.4
44.5
Private sector external debt
492.6
566.4
649.2
546.8
465.1
477.0
GENERAL INDICATORS
PRODUCTION AND DEMAND, % Y-O-Y
PRICES, % Y-O-Y
BUDGET, % GDP
CURRENCY, RUB / USD
EXTERNAL SECTOR, BLN USD
Source: Bank of Russia, Ministry of Finance, Rosstat
45
13
ABBREVIATIONS
CBR
Central Bank of the Russian Federation
DCC
Depositary Clearing Company
FAS
Federal Anti-Monopoly Service of the Russian Federation
FSFM*
Federal Service for Financial Markets
MICEX
Moscow Interbank Currency Exchange
MICEX-RTS
Moscow Exchange
MINFIN
The Ministry of Finance of the Russian Federation
NAPF
Self-regulatory organization Non-profit partnership “National Associations of Non-State Pension Funds”
NAUFOR
Russian National Association of Securities Market Participants
NCC
National Clearing Centre
NLMC
Not-for-profit partnership “National League of Management Companies”
NSD
National Settlement Depository
NSMA
National Securities Market Association
PARTAD
Professional Associations of Registrars, Transfer Agents and Depositories
RTS
“Russian Trading System” Stock Exchange
URPSMP
Ural Region Non-Profit Professional Securities Market Participant Partnership
* On September 1, 2013, the FSFM was annulled by Presidential Decree No 645 dated July 25, 2013. The functions of regulation, control and supervision of the financial market were
transferred to the Central Bank of the Russian Federation
47

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 forwardlooking 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 forwardlooking statements are based.
CALENDAR FOR YEAR 2017 (RUSSIA)
January
Mo
Tu
We
February
Th
Fr
Sa
Su
Mo
Tu
1*
March
We
Th
Fr
Sa
Su
1
2
3
4
5
Mo
Tu
We
Th
Fr
Sa
Su
1
2
3
4
5
2*
3*
4*
5*
6*
7*
8*
6
7
8
9
10
11
12
6
7*
8*
9
10
11
12
9
10
11
12
13
14
15
13
14
15
16
17
18
19
13
14
15
16
17
18
19
16
17
18
19
20
21
22
20
21
22* 23* 24
25
26
20
21
22
23
24
25
26
23
24
25
26
27
28
29
27
28
27
28
29
30
31
30
31
Mo
Tu
Fr
Sa
Su
Mo
Tu
We
Th
Fr
Sa
Su
Mo
Tu
We
1
2
1*
2
3
4
5
6
7
+
9*
10
11
12
13
14
5
6
April
We
+
May
Th
June
Th
Fr
Sa
Su
1
2
3
4
7
8
9
10
11
3
4
5
6
7
8
9
8
10
11
12
13
14
15
16
15
16
17
18
19
20
21
12*
13
14
15
16
17
18
17
18
19
20
21
22
23
22
23
24
25
26
27
28
19
20
21
22
23
24
25
24
25
26
27
28
29
30
29
30
31
26
27
28
29
30
Mo
Tu
We
Fr
Sa
Su
Mo
Tu
We
Th
Fr
Sa
Su
Mo
Tu
We
Fr
Sa
Su
1
2
1
2
3
4
5
6
1
2
3
July
August
Th
September
Th
3
4
5
6
7
8
9
7
8
9
10
11
12
13
4
5
6
7
8
9
10
10
11
12
13
14
15
16
14
15
16
17
18
19
20
11
12
13
14
15
16
17
17
18
19
20
21
22
23
21
22
23
24
25
26
27
18
19
20
21
22
23
24
24
25
26
27
28
29
30
28
29
30
31
25
26
27
28
29
30
31
October
Mo
Tu
We
Th
November
Fr
Sa
Su
Mo
Tu
We
Th
Fr
Sa
Su
1
2
3*
4*
5
7
8
9
10
11
12
4
5
6
1
2
3
4
5
6
7
8
6
+
December
Mo
Tu
We
Th
Fr
Sa
Su
1
2
3
7
8
9
10
9
10
11
12
13
14
15
13
14
15
16
17
18
19
11
12
13
14
15
16
17
16
17
18
19
20
21
22
20
21
22
23
24
25
26
18
19
20
21
22
23
24
23
24
25
26
27
28
29
27
28
29
30
25
26
27
28
29
30
31
30
31
HOLIDAYS (*)
REDUCED
WORKING DAYS (*)
STAGGERING
OF HOLIDAYS (+)
1, 2, 3, 4, 5, 6, 8 Jan New Year Holiday Week
22 Feb
7 Mar
3 Nov
1 Jan to 24 Feb
7 Jan to 8 May
4 Nov to 6 Nov
7 Jan
Orthodox Christmas Day
23 Feb Defender of the Fatherland Day
24 Feb New Year Holiday Stagger
8 Mar
International Women's Day
1 May
Spring and Labor Day
8 May
Orthodox Christmas Day Stagger
9 May
Victory Day
12 Jun
Russia Day
4 Nov Unity Day
6 Nov
Unity Day Stagger
CONTACT INFORMATION
Address: 12, Spartakovskaya Street,
Moscow, Russian Federation
Phone: +7 495 234 4827
Fax: +7 495 956 0938
E-mail: [email protected]
Website: www.nsd.ru/en

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