Moscow Exchange offering new opportunities for non-resident clearing participants
Moscow Exchange is completing a project to separate the "trading member" and "clearing member" statuses on its markets.
Beginning on 9 August, international banks will be able to obtain the status of a clearing member, which will allow their clients to keep collateral and cash in the foreign bank's accounts with National Clearing Centre (NCC), part of Moscow Exchange Group. Non-residents will also have access to the Deposit with CCP segment of the Money Market and will be able to efficiently manage their liquidity positions in RUB as well as foreign currency.
NCC has also started to act as a tax agent for transactions concluded on Moscow Exchange by non-resident clearing members and their clients. The tax agent ensures calculation, withholding and payment of income tax of non-resident clearing members and their clients to the Russian state, and also reports to the tax authorities the amounts of income paid to foreign persons.
These new options will allow international clients trading on Moscow Exchange to minimize credit and counterparty risks and increase the volume of transactions in Russian assets.
Igor Marich, member of the Executive Board, Managing Director for Sales and Business Development at Moscow Exchange, said:
"Moscow Exchange is a global platform that not only facilitates trading in instruments from all over the world, but also provides market participants from different jurisdictions access to the entire Russian financial market. International participants account for approximately 50% of the trading volume on the Equity and Derivatives Markets, and developing business with international participants strengthens MOEX's position as a pricing center for Russian assets and is part of our strategy. The opportunity for international financial institutions to become direct clearing members in all markets will allow them to expand their operations."
Eddie Astanin, Chief Executive Officer of NCC, said:
"These developments mean that NCC, as a qualified central counterparty, becomes a counterparty to trades executed by non-residents, ensuring settlement of the trades. This service will reduce the risks of non-resident clearing members, which, in turn, will increase their trading limits on the Russian market."
As part of the project to separate trading and clearing member statuses, non-residents can obtain the status of Individual Clearing Member (ICM), which enables them to trade on MOEX’s markets and independently clear and settle trades, as well as provide their institutional clients with collateral and cash deposits directly into the NCC's accounts.