National Settlement Depository Sums Up Q2 2016 Results

• 1,455 shareholder meetings were held with the use of the e-proxy voting technology (in the ISO 20022 format)
• The value of assets under custody grew by 12% to RUB 32.2 trillion
• The value of OFZ balances in foreign nominee accounts rose by one third YoY and amounted to RUB 1.3 trillion

CSD Services

In the second quarter of 2016, the value of securities under custody reached RUB 32.2 trillion; this was a 12% increase as compared with the same period of 2015 (RUB 28.7 trillion). The number of security issues serviced by NSD rose by one third (from 7.8 thousand in Q2 2015 to 10.2 thousand in Q2 2016).

The number of inventory operations in the central securities depository (CSD) increased by 8% – to 642 thousand in Q2 2016 (597 thousand in Q2 2015), including 515 thousand operations on exchange trades (+8%; 476.5 thousand operations in Q2 2015) and 127.3 thousand operations on OTC trades (120.8 operations in Q2 2015). 

In Q2 2016, the value of off-exchange DVP transactions grew substantially and amounted to RUB 1.2 trillion. This was by 2.1 times more than in Q2 2015 (RUB 562 billion).

The value of federal loan bond (OFZ) balances in foreign nominee accounts increased by one third (RUB 946.7 billion in Q2 2015) and reached RUB 1.3 trillion.

In May 2016, the Ministry of Finance of the Russian Federation placed sovereign Eurobonds with the use of a new technology. For the first time, Eurobonds were issued by the Russian infrastructure: NSD performed the placement of the new issue as a head depository. The Ministry recognized the placement successful and announced its plans to use this scheme in future again.

Collateral Management System (CMS)

In Q2 2016, the value of repo transactions with the Federal Treasury performed with the use of the NSD collateral management system grew by 5.3 times YoY and reached RUB 9.5 trillion (RUB 1.8 trillion in Q2 2015); the number of transactions stood at 509, or by 4.2 times more than in Q2 2015 – 121 transactions.

In the reporting period, the value of repo transactions with the Bank of Russia conducted via the NSD collateral management system amounted to RUB 2.5 trillion (RUB 9.8 trillion in Q2 2015).

Repository

In Q2 2016, the number of contracts registered with NSD’s Repository reached 107.2 thousand (99 thousand in Q2 2015). The value of registered trades was RUB 96.2 trillion (RUB 87 trillion in Q2 2015).*

The largest number of transactions registered in Q2 2016 included contracts with the following types of instruments:

• Currency forward (64,536);
• Currency swap (32,954);
• OTC repo (4,193).

For comparison, the following types of transactions were among the most frequently reported trade types in Q2 2015:

• Currency forward (58,265);
• Currency swap (34,380);
• OTC repo (5,326).

The key stage of the Repository 2.0 project was successfully completed: the market adapted to the new procedure via reporting agents and to powers of attorney dismissal. The number of users of the Repository’s Web-client, which became a part of upgraded NSDirect, rose by 4.5 times — from 68 users in March to 306 users in June 2016.

In addition, for clients’ convenience, NSD provided repository operations participants with an opportunity to use a free mechanism for generating unique transaction identifier, mandatory for reporting starting 1 July, 2016.

Corporate Actions Center (CAC)

In Q2 2016, 1,455 shareholder meetings were held with the use of the new e-proxy voting technology based on ISO 20022 (76 meetings in 2015).

1,267 corporate actions on foreign securities were held in Q2 2016; this is by 85% more than a year before (1,059 actions).

To ensure compliance with the laws of the Russian Federation that went into force on 1 July 2016, NSD implemented the functionality, providing stock market participants’ interactions when processing the following corporate actions:

• pre-emptive right;
• acquisition of securities by the issuing company;
• share repurchase by the issuing company at shareholders’ request;
• voluntary tender offer to purchase shares;
• mandatory tender offer to purchase shares;
• mandatory purchase of shares from minority shareholders by a shareholder with a 95%+ interest;
• drawing up a list of persons entitled to participate in security holders’ meetings; and
• participation in security holders’ meetings.

The introduced technology allows interacting with NSD automatically using NSD’s EDI and SWIFT, or by means of NSDirect.

Along with that, NSD continues to develop the service of electronic voting on the website (e-voting). As part of the e-voting project, the Ministry of Telecommunications approved NSD’s connection to the Ministry’s services allowing to identify persons in the Internet remotely.

Information services

In Q2 2016, the number of clients using NSD information services continued to grow. The number of requests for basic information on securities and issuers on NSD’s website rose by 2.8 times – to 113,770 requests. Meanwhile, the number of subscribers for commercial services increased by 2.6 times YoY. The number of users of NSD’s Valuation Center increased by 2.3 times YoY.

NSD successfully completed the first phase of its work on launching nsddata.ru: now, the Corporate Information Center broadcasts news on this website. In 2017, the nsddata.ru portal will become a single point of access to all information services of NSD and will provide users with newest customization and data import options.

Payment and settlement system

In Q2 2016, the value of money transfers increased by 3% against the same period of 2015 and reached RUB 82.2 trillion (RUB 79.8 trillion in Q2 2015).

In the reporting period, NSD conducted first PVP settlements.

National Numbering Agency and pre-Local Operating Unit (pre-LOU)

NSD acts as Russia’s Numbering Agency and the substitute numbering agency for the CIS countries, assigning ISINs and CFIs. NSD also functions as a pre-Local Operating Unit (pre-LOU). Legal Entity Identifiers (LEIs) assigned by NSD are recognized by regulators, market participants and pre-LOUs of other countries.

In Q2 2016, NSD assigned 39 LEIs; it was less than a year ago (230 codes). The depository verified 196 LEIs. It considerably exceeded the Q2 2015 figure (22 LEIs). One LEI was accepted for servicing from another pre-LOU at the request of the owner who wished NSD to service the LEI in future.

In Q2 2016, NSD assigned 324 ISINs and CFIs to Russian financial instruments – this was by 17% more than in Q2 2015 (278 codes); in addition, as a substitute numbering agency, NSD assigned 27 ISINs and CFIs.

_____

* Excluding contracts registered in the form of quarterly reports for April-June 2015, among which were transactions concluded in Q1 2015 which accounted for additional 29.6 thousand trades with RUB 41.9 trillion value.