OREANDA-NEWS. December 23, 2008. International Agency Thomas Murray specializing in provision of ratings to financial infrastructural organizations, global and domestic custodians has raised The Depository Clearing Company's (DCC) rating from A to A+, which means low risk. The outlook is Stable.

The increase in the rating reflects the significant progress made by DCC during the past year in minimising risk and, as a result, three of the six risk components have been upgraded. Both Asset Commitment and Financial Risk have been upgraded to A+, and Liquidity Risk has been upgraded to A. Counterparty Risk, Operational Risk and Asset Servicing Risk ratings remain unchanged.

Thomas Murray notes the following key contributing developments to the rating upgrades:

DCC has continued to automate the data transfer process with registries by further extending the use of the Electronic Data Interchange (EDI) linkage to four new registries and renewing nine existing agreements to allow enhanced automated matching and efficient security transfer between registries. Also, DCC has established security sub-accounts with custodians, to support near immediate direct transfer of securities between DCC and custodian clients on register.

Introduction of DVP net cash settlement multiple batch process and the single platform for USD and RUB settlement have provided a low risk, cost effective settlement option.

DCC's capital has increased from RUB273.2 million to RUB1,124.7 million. The higher capital, coupled with DCC's USD50 million insurance coverage, has strengthened DCC's balance sheet against unforeseen events and claims.

Although the outlook is regarded as ‘Stable', which indicates that there are no imminent developments that may change the A+ rating at this stage, DCC has other activities underway that are likely to have a positive impact towards reducing its risk profile in the future. These include a comprehensive programme to improve governance around the internal risk management framework and tighten internal controls; the re-engineering of business processes in pursuit of ISO 9000/9001/2000 accreditation; the initiation of a project to develop a BCP response capacity based upon British Standard 25999; and the implementation of a new depository and net settlement system DEPO/X.

Simon Thomas, CEO and Chief Ratings Officer of Thomas Murray said: “During the rating process, Thomas Murray has closely examined the changes that have taken place at DCC and noted the progress made by DCC in some key risk areas, which has led to an upgrade in several of the risk components. DCC has also demonstrated its strong management commitment to further reduce its risk profile through support for STP and adoption of other risk reduction management measures. Overall, this upgrade in its risk rating reflects the achievements obtained by DCC in minimising the risk exposure faced by market participants”.

Mikhail Laufer, President of The Depository Clearing Company, said “The Depository Clearing Company is pleased with the overall rating upgrade. DCC has worked diligently in the last year to address those areas for further risk reduction identified by Thomas Murray in the 2007 assessment, and we have projects in train to further minimise custody and settlement risk”.

The full text of Thomas Murray Report can be found on corporate web-sites of Thomas Murray and Depository Clearing Company.