Clearstream will work with its international central securities depository (ICSD) counterpart to ensure an effective linkage – known as the Bridge – between the two ICSDs. The Bridge enables customers to easily settle transactions between accounts at the two ICSDs and will thus help increase liquidity flow in the Russian market according to Clearstream.
The introduction of settlement for corporate Russian bonds, coupled with a firm commitment to establish the Bridge between the ICSDs will help further develop the market infrastructure needed to offer investors and issuers an enhanced offering in the Russian capital market.
Illustrating the increased foreign investor appetite in the Russian market, the share of foreign investment in OFZ government bonds has gone up by around 25% since the establishment of new financial market infrastructure in Moscow according to the Bank of Russia.
As a next step, Clearstream will look to offer settlement for equities via its direct link to the NSD, due for summer 2014, in line with expected changes to Russian legislation. Meanwhile, Clearstream continues to settle equities in Russia via its indirect link to the NSD through Clearstream’s local agent bank, Deutsche Bank Moscow.
“Entry of international clearing and settlement organisations to the OFZ market has already provided a positive impact by decreasing the cost of borrowings for the government,” said Sergey Shvetsov, First Deputy Governor of the Bank of Russia.
“We have to improve accessibility of corporate actions information, develop new products like collateral management and serve investors from around the world in line with best practice,” said Eddie Astanin, chairman of the executive board, NSD. “We believe that today’s launch is another big step in establishing Moscow as one of the global financial centres.”