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Requirements for Clearing Members

CM categories

CM categories:

  • Category "О" Clearing Member - General Clearing Member (Clearing Broker inclusively), is admitted to the clearing of partially secured trades
  • Category "B" Clearing Member - Individual Clearing Member, is admitted to the clearing of partially secured trades
  • Category "C" Clearing Member - Individual Clearing Member, is not admitted to the clearing of partially secured trades


Requirements in respect of Category "C" Clearing Members:

General requirements

  • Clearing membership agreement in force
  • agreement on integrated technical service provision, concluded with the Technical Centre, in force
  • to be a participant of the EDI System of the Moscow Exchange
  • to meet NCC requirements regarding information and reporting provision, stipulated by the Clearing Rules

Additionally for Credit Institutions

  • valid banking license issued by the Bank of Russia

Additionally for Non-credit Institutions, which perform licensed activities on the financial Market

  • valid license, issued by the Bank of Russia, on performing the particular type(s) of activity by non-credit financial institutions
  • valid broker license and/or dealer license and/or trust management license (for Clearing Members – Non-credit Institutions that are Professional securities market participants)

Additionally for Non-credit Institutions, which perform microfinance activities

  • information on such entities shall be included by the Bank of Russia in the state register of microfinance market participants

Additionally for Non-resident Banks

  • valid special permission (a license or other basement), issued by a competent authority of the state of establishment of a Non-resident Bank, on the basis of which a Non-resident Bank is entitled to execute banking operations, stipulated by a personal law

Additionally for Clearing Members that are Non-resident Non-credit Institutions or Non-credit Institutions, which do not perform licensed activity on the financial market or microfinance activity

  • valid special permission on performing operations on financial markets, issued by a competent authority of the state of establishment of a Clearing Member, or own assets (capital) not less than 1 000 000 000 (one billion) Russian rubles

Requirements in respect of Category "B" Clearing Members:

in addition to requirements, set in respect of Clearing Members of the category "C":

General requirements

  • contribution to the Default Fund of the relevant market in the amount defined for each market
  • there shall be no facts showing decline in the financial statement and/or there shall be no information that gives reasons to consider decline in the financial statement of a Clearing Members possible and/or inability of a Clearing Member to fulfil its obligations under Partially Secured Trades, to pay Margin Calls and/or other obligations of a Clearing Member, arising from the Clearing Rules (this requirement does not refer to national (central) banks of EurAsEC/EAEC member states)

Financial stability requirements

  • no grounds for bankruptcy-prevention measures under the laws of the Russian Federation on insolvency (bankruptcy) or under the domicile law of the Clearing Member
  • the Clearing Members - Credit Institutions shall comply with mandatory indicators and requirements for the minimum amount of equity (capital) set by the Bank of Russia / established by the competent authority of the state of establishment if, in accordance with the national legislation of the state of establishment of the Clearing Member, such mandatory indicators / requirements are established
  • no grounds for revocation by the Bank of Russia of the banking license under the banking legislation, no grounds for withdrawal in accordance with the national law of the country of registration of the Non-Resident Bank of a special permit (license or other document) issued by the competent authority of the country of registration of the Non-Resident Bank, where under the Non-Resident Bank is entitled to conduct banking operations


Requirements in respect of Category "O" Clearing Members

in addition to requirements, set in respect of Clearing Members of the categories "B" and "C":

General requirements

  • proprietary funds (equity) not less than 50 000 000 000 (fifty billions) Russian rubles,

or

  • proprietary funds (equity) not less than 20 000 000 000 (twenty billions) Russian rubles and

- international long-term credit rating in respect of obligations in Russian rubles or in foreign currency not lower than BB+ according to the rating agencies "Standard & Poor's" or "Fitch Ratings" or "Ba1" according to the rating agency "Moody's Investors Service", or

- national credit rating not lower than А- according to the Analytical Credit Rating Agency (АCRА) or the rating agency "Expert RA",

or

  • proprietary funds (equity) not less than 20 000 000 000 (twenty billions) Russian rubles under condition that an organization that is entitled directly or indirectly supervise the activity of a Clearing Member, has:

- international long-term credit rating in respect of obligations in Russian rubles or in foreign currency not lower than BB+ according to the rating agencies "Standard & Poor's" or "Fitch Ratings" or "Ba1" according to the rating agency "Moody's Investors Service", or

- national credit rating not lower than А- according to the Analytical Credit Rating Agency (АCRА) or the rating agency "Expert RA".

  • valid license issued by the Bank of Russia on executing banking operations with funds in Russian rubles and foreign currencies and/or a license on performing clearing activity (for Clearing Members - Residents).

Additionally for Clearing Members that are Non-resident Non-credit Institutions

  • valid special permission (license or other basement), issued by a competent authority of the state of establishment of a Clearing Member


Special requirement in respect of Clearing Members

Residence Organization
type
Organization
category
Category "C" Category "B" Category "O"
Securities, Deposit
and Credit Market
FX and Precious
Metals Market
Securities, Deposit
and Credit Market
FX and Precious
Metals Market
Derivatives
Market
Standardized OTC
Derivatives markets
Commodities
Market
Securities, Deposit
and Credit Market
FX and Precious
Metals Market
Derivatives
Market
Residents Credit Institutions Banks and non-bank financial institutions             In the absence of financial market trading license Equity ≥ 1 bn RUB Equity ≥ 50 bn RUB
or
- Equity ≥ 20 bn RUB and
- External rating:
S&P / Fitch ≥ BB+ or
Moody's ≥ Ba1 or
АCRА/ Expert RA ≥ A-*
Non-credit Institutions Professional securities market participants           Equity ≥ 0,3 bn RUB
Non-credit Institutions Investment fund managers       Not admitted    
Non-credit Institutions Insurance companies           собственные средства (капитал) ≥ 10 млрд руб.
и
рейтинг S&P / Fitch на уровне не ниже BB-, либо рейтинг Moody's не ниже Ba3, либо рейтинг АКРА / Эксперт РА не ниже A-
Non-credit Institutions NPF       Not admitted    
Regional authorities       External rating:
S&P / Fitch ≥ BB+ or
Moody's ≥ Ba1 or
АCRА/ Expert RA ≥ A-
       
Corporations   Equity ≥ 1 bn RUB
or
Clearing Member shall provide an irrevocable and unconditional guarantee issued by an entity that has External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-
Equity ≥ 1 bn RUB Equity ≥ 10 bn RUB Equity ≥ 50 bn RUB
or
- Equity ≥ 20 bn RUB and
- External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-*
  Equity ≥ 10 bn RUB
or
- Equity ≥ 20 bn RUB and
- External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-*

Clearing member has at least 2 (two) employees, all of which correspond to the requirements, stipulated in paragraph 4.6.3 of the Clearing Rules
Equity ≥ 0,1 bn RUB
and

Clearing Member shall provide a letter from an organization that is entitled directly or indirectly supervise the activity of a Clearing Member has Equity ≥ 1 bn RUB
Non-residents Banks       Equity ≥ 10 bn RUB
or
- Equity ≥ 5 bn RUB and
- External rating:
S&P / Fitch ≥ BB- or Moody's ≥ Ba3
    Equity ≥ 0,3 bn RUB
and
External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-*
 
Financial companies             Equity ≥ 0,3 bn RUB
and
External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-*
 
Corporations   Equity ≥ 1 bn RUB
or
Clearing Member shall provide an irrevocable and unconditional guarantee issued by an entity that has External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-
Equity ≥ 1 bn RUB Non EurAsEC/EAEC Clearing Member:
Equity ≥ 10 bn RUB

EurAsEC/EAEC Clearing Member:
Equity ≥ 50 bn RUB
or
- Equity ≥ 10 bn RUB and
- External rating:
S&P / Fitch ≥ BB- or Moody's ≥ Ba3
or
- Equity ≥ 20 bn RUB and
- direct state ownership - more than 50%
Equity ≥ 50 bn RUB
or
- Equity ≥ 20 bn RUB and
- External rating:
S&P / Fitch ≥ BB- or
Moody's ≥ Ba3 or
АCRА/ Expert RA ≥ A-*
     


* Clearing Member or an organization that is entitled directly or indirectly supervise the activity of a Clearing Member

Category assignment and change

Clearing Member, which is not admitted to the clearing service on the relevant market, shall submit the Application for the clearing service provision in order to receive admission.

Clearing Member, which is admitted to the clearing service on the relevant market, shall submit the Application for the category change in order to change category. NCC executes such Application if the following requirements are met:

  • there is no Margin Calls through all Settlement Accounts;
  • there is no unpaid Debts through all Settlement Accounts.

NCC changes category if the abovementioned requirements are met and also if there is no non-fulfilled obligations under Trades, executed by the Market Participant with the indication of the relevant Clearing Member of the category "O" as the clearing broker.

  • NCC is entitled to change category of the Clearing Member from "C" to "B" without application if the Clearing Member meets the abovementioned requirements, set for the Clearing Member of the category "B".
  • NCC is entitled not to admit the Clearing Member to the clearing service on the relevant market(s):

- in the absence of positive financial result or positive retained earnings as of the last reporting date;

- provided the Clearing Members does not comply with the financial stability requirements;

- in the case of reputation risk that can arise from clearing service provision to the Clearing Member.