OREANDA-NEWS. National Settlement Depository (NSD), Russia's central securities depository, sums up the results of the fourth quarter of 2014.

Central securities depository (CSD) services

The value of securities on deposit in Q4 2014 reached RUB24.9 trillion; this is 14% more than in the same period of 2013 (RUB21.8 trillion). The value of foreign securities on the NSD clients' depository accounts exceeded RUB2.7 trillion, increasing almost five fold against Q4 2013 (RUB566.9 billion).

The number of inventory operations conducted by the CSD in Q4 2014 exceeded 669,000; this is 1.6% more than in Q4 2013. A number of exchange operations in Q4 2014 amounted to 524,800 against 517,500 in the same period of 2013 (1.4% increase Y-o-Y). The number of OTC operations 2.3% grew Y-o-Y (from 141,100 in 2013 to 144,300 in 2014); it includes 71,600 DVP operations (this is 14.5% more than in Q4 2013) and 72,700 FOP operations (7.4% decline against Q4 2013).

In November 2014, NSD signed a memorandum of understanding with Merkezi Kayıt Kuruluşu A.Ş. (MKK), Turkey's CSD. The signed document is aimed at information exchange and cooperation in the sphere of CSD services including e-proxy voting technologies used during corporate actions.

Collateral management system

In Q4 2014, the number and the value of repo transactions with the Bank of Russia with securities basket amounted to 3,124 operations and RUB21.6 trillion respectively; this is 58% and 79% more than the same indicators in Q4 2013.

Meanwhile, in December 2014, the value of securities used as collateral in OTC repo transactions with the Bank of Russia with securities basket rose to a record amount of RUB2 trillion2.

In addition, the number of participants who signed up for the NSD collateral management service increased from 154 banks in 2013 to 205 banks in 2014.

Repository

In Q4 2014, the number of reports on OTC transactions registered with the repository exceeded 46,0003, or 3.5 times more than in the same period of 2013. The total value of OTC transactions reported by the participants in Q4 2014 exceeded RUB85.5 trillion. This is five times more than in Q4 2013. It should be noted that from 5 November 2013 the participants must submit reports on repo transactions and currency swaps to a repository (prior to this, the reports have been submitted voluntarily). In addition to this, some market participants began submitting data on other types of transactions with derivatives despite the fact that these reports are not mandatory.

The number of reports on repo transactions and currency swaps requiring mandatory disclosure exceeded 13,4004; this is 72% more than in Q4 2013. There was a high level of participants' activity in respect of submitting reports on currency forward transactions: in Q4 2014, the repository registered 30,860 reports on this type of transactions (86,560 for the whole last year). Moreover, in Q4 2014 the clients submitted information on currency and commodity options, commodity forward transactions and securities forward transactions to the repository.

Corporate Action Center

In Q4 2014, the number of corporate action operations held by NSD was 21% more than in the same period of 2013 (3,820 in 2014 against 3,140 in 2013). 567 of these operations were conducted with foreign securities; this is 75% more than the same indicator of 2013.

NSD provides an opportunity of remote voting at the shareholder meetings to its clients using the e-proxy voting technology5. In Q4 2014, 181 extraordinary shareholder meetings were held on the basis of this technology.

In November 2014, as a part of the corporate action reform, NSD launched a service of providing information to its depositors about shareholder meetings and bond repayment in respect of Russian and foreign securities in accordance with the ISO20022 and ISO15022 standards:

Meeting notification;

Meeting result dissemination;

Meeting cancellation;

Corporate action notification;

Corporate action cancellation advice.

NSD information services

In Q4 2014, NSD completed an implementation of new information products of the module database that contains information about securities issues, issuers and organizations connected with securities. All modules are interconnected and may be used as a unified database. The following modules were launched: Shares, Bonds, IT Units, Organizations. Issuers may place information about non-mandatory corporate actions on the NSD's website (in the special section "Issuer's Page").

The valuation center of NSMA

In Q4 2014, NSD and National Securities Market Association (NSMA) were actively developing a joint project - The valuation center of NSMA. Several new groups of instruments including standardized derivatives and shares of the Bank of Russia's Lombard List were included in the daily calculation of price parameters; a list of bonds used for calculation of the fair price was expanded; the Center's specialists began calculating the fair value of mortgage bonds including the previous bond issues on the basis of the method approved by the Housing Mortgage Finance Agency. Money market participants received an access to the product via the Moscow Exchange's trade terminals. Within the framework of development and improvement of the fair price calculation method, an independent expertise of the method was conducted by the Guild of Investment and Financial Analysts (GIFA); based on the expertise's results, a decision was made to provide a verification certificate for 2015. In addition to this, in the end of 2014, the European Bond Commission began conducting a research to provide the international verification of the Price Center's method.

Payment system

The NSD payment system has been assessed by the Bank of Russia: the regulator has recognized a high level of observance of the Principles for Financial Market Infrastructures developed by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) and recommended by the Bank of Russia for observance by the important payment systems. The CPMI-IOSCO principles are developed for financial infrastructures playing an important role in creating the conditions for financial stability.

The value of cash transfers 14.6% grew as compared with Q4 2013 and reached RUB91.7 trillion against RUB84.7 trillion for Q4 2013.

National numbering agency

NSD functions as the national numbering agency in Russia and the substitute numbering agency for the CIS countries, assigning ISINs and CFIs to Russian issuers' securities and other financial instruments issued or registered in the territory of Russia and other CIS countries. NSD has also got a status of the pre-Local Operating Unit (pre-LOU). Pre-LEIs assigned by NSD are recognized by regulators, market participants and pre-LOUs of other countries.

Following the results of 2014, the TABB Group and Alacra included NSD in the international rating of 14 leading organizations assigning pre-LEIs.

Q4 2014 was the most active quarter of the year for NSD as a pre-LOU. As of the end of the quarter, 111 pre-LEIs were assigned to Russian financial market participants. It is remarkable that NSD received two codes for servicing from other LOUs upon the client's request.

In Q4 2014, NSD assigned 317 ISINs and CFIs to Russian financial instruments; this is by one third more than in Q4 2013. As the substitute numbering agency, NSD assigned 109 ISINs and CFIs in Q4 2014.