OREANDA-NEWS. January 24, 2011. National Settlement Depository (NSD), Russia's only settlement depository servicing the full range of debt and equity securities of Russian issuers, has summed up its operating results for 2010.

Eddie Astanin, Chairman of the Executive Board, NSD, pointed out: "Formation of a settlement depository with non-banking credit organization's license on basis of NDC and MICEX Settlement House is considered by us as the most important event of 2010. At the same time an operating integration of the two companies was going in compliance with a principle of reliability and business process continuity. NSD maintained a positive dynamics of growth of its general operational indicators. Our plans now include improvement of existing products and services and introduction of new combined post trading services and products."

Cash and Securities Settlements

NSD's customers’ cash accounts turnover and securities turnover (the market value of securities transferred in inventory operations) for 2010 reached record figures: RUB174.4 trillion and RUB67.7 trillion correspondingly. It is 4.2% and 12.8% more than for 2009 (RUB167.4 trillion and RUB60.06 trillion respectively).

Cash settlements on MICEX Group's markets at the market closing prices

In 2010 the aggregate turnover of trading accounts for provision of settlements between participants on MICEX Group's on-exchange markets amounted to RUB84.275 trillion, including:
on stock exchange market: RUB62.086 trillion (0.5% reduction against 2009);
on governmental securities market: RUB19.978 trillion (increased by 2.5% against 2009);
on derivatives market : RUB2.211 trillion (decreased by 70.6% against 2009)

Turnover of the bank accounts of the clearing organization on currency market amounted to RUB35.5 trillion for 2010.

Operations conducted through the Bank of Russia's settlement network

A number of payments effected using NSD's correspondent account with the Bank of Russia for 2010 increased by 20.2% (536,847 payments).

In 2010 a turnover of NSD's correspondent account with the Bank of Russia using its RTGS system, Banking Electronic Speedy Payments (BESP) rose by 11.4% against 2009 and reached RUB88.876 trillion. A number of payments effected using NSD's correspondent account with the Bank of Russia using the BESP system grew almost six fold amounting to 21,878 payments. A significant increase in the operations held using the BESP system was attributable to technical improvements in the software and settlement services.

Securities safekeeping

The market value of securities on deposit with NSD increased 26.8% amounting to RUB7.718 trillion (as of 31 December, 2010) compared with the 2009 figure of RUB6.085 trillion. Growth of market value of Russian issuers' shares on deposit with NSD for 2010 reached 28%. Increase in aggregate nominal value of corporate and regional bonds on deposit with NSD for 2010 was 15.6%; nominal value of Eurobonds on deposit with NSD decreased by 28.1%, and UIT units’ market value grew by 53.5%. The value of Bank of Russia's bonds on deposit with NSD doubled reaching RUB593 billion as of 31 December, 2010.

The number of inventory operations conducted by NSD for 2010 grew by 10.3% and amounted to 2,738,058, including 2,179,921 operations with shares (79.6% of all operations). A growth in the number of inventory operations with shares for 2010 amounted to 10.4%.

The number of issuers serviced by NSD amounted to 1,575; this is 10.4% more against 2009. The number of securities issues serviced by NSD in 2010 reached 3,268; it makes 12.8% growth against the data as of 31 December, 2009. At the same time the number of foreign issuers' Eurobonds serviced by NSD increased by 92% reaching 286. The number of foreign companies' shares issues serviced by NSD grew from 3 to 19 issues as of 31 December, 2010. Number of depository accounts for 2010 amounted to 1,901 accounts including accounts of non-residents. The total number of securities on deposit with NSD decreased by 4% (from 2.101 trillion as of 31 December, 2009 to 2.016 trillion as of 31 December, 2010).

NSD as paying agent expands its market share

NSD retains its leadership among the top Russian paying agents on corporate and regional bonds. As of 1 January, 2011 NSD's share in this market reached 39% basing on total number of corporate and regional bonds in circulation and 41.6% basing on the number of the issuers of corporate and regional bonds in circulation.

In 2010 NSD as a paying agent serviced 121 new bond issues of 76 issuers and 300 bond issues of 170 issuers.

For 2010 NSD provided 651 payments on corporate and regional bonds as well as on the Bank of Russia's bonds for a total sum of RUB1.331 trillion; this is a nine fold increase against 2009 (600 payments for RUB148 billion). NSD has also made payments for RUB17 billion as an income on registered securities (dividends and income on closed-end UITs units, funds from redemption of shares); this is 61% more than in 2009 (RUB11 billion). NSD received and transferred to its depositors an amount of RUB25 billion as payments on foreign securities.

For all period of qualification of foreign financial instruments as securities NSD provided information on 15,426 financial instruments to market participants.

Acting as Russia’s national numbering agency, NSD assigns international ISIN and CFI codes to Russian financial instruments, sends information about assigned codes to the international database and timely updates this information.

For 2010 NSD assigned international ISIN and CFI codes to 576 Russian securities and withdrew ISIN codes from 306 Russian securities.

In 2010 the company for the first time assigned ISIN codes to the following new types of securities and financial instruments:

• first foreign financial instruments placed in Russia and qualified as securities: EBRD's bonds and Belarusian government bonds nominated in Russian rubles

• Sberbank's Russian Depository Receipts confirming ownership right for United Company RUSAL Plc's common registered shares admitted to trading in MICEX Stock Exchange on 24 December, 2010

• Bank of Russia's Deposit Rates

Since 2008, in accordance with the Russian Federal Financial Markets Service’s “Regulations for Foreign Financial Instruments as Securities” approved by FFMS Order #07-105/pz-n of Oct. 23, 2007, NSD, being a member of the Association of National Numbering Agencies (ANNA), provides to the stock market participants services aimed at qualification of foreign financial instruments as securities.

For all the period of provision of qualification of foreign financial instruments the company received and processed requests on ISIN and CFI codes of 45,859 foreign financial instruments (including requests on the same instrument sent by different clients). By late 2010 NSD submitted information on 15,426 instruments to the market participants. Thus the number of foreign financial instruments which conform to the FFMS qualification requirements amounted to 13,137.

Note

Value of securities held in NSD accounts is an operational indicator which does not include the market value of other assets held in issuers’ accounts. The value of shares and units of Unit Investment Trusts is based on market value, and the value of bonds is based on nominal value.

About NSD

National Settlement Depository (NSD) is the largest settlement depository in Russia, a part of the MICEX Group, servicing on-exchange and OTC transactions with all types of debt and equity securities of Russian issuers and providing settlement services to participants in financial markets of the Russian Federation.

NSD provides storage of global certificates and depository accounting for 99% of corporate bond issues, sub-federal and municipal bond issues. It services 100% of transactions conducted in the federal bond and the Bank of Russia bond markets, more than 99% of transactions conducted in the corporate and regional bond markets, the majority of transactions with equities and also services UIT units and securities of foreign issuers.

In accordance with agreements concluded between NSD and the Bank of Russia, NSD acts as a settlement center for the organized securities market.

NSD is Russia's national numbering agency and the substitute numbering agency for the CIS, authorized to assign the international ISIN and CFI codes.