Moscow Exchange Group’s corporate governance system is based on Russian statutory rules and recommendations issued by the Central Bank of Russia, as well as on international best practices

and standards. To improve the quality and effectiveness of corporate governance, the system is constantly being improved to align with the requirements of regulatory bodies, the opinions of shareholders and investors, and the Group’s development strategy.

The corporate governance system of Moscow Exchange Group is comprised of the following governing, auxiliary, and control bodies:

• the General Shareholders Meeting is the supreme governing body;
• the Supervisory Board handles general management of Moscow Exchange’s activities and strategic management;
• the Supervisory Board committees have an advisory role; their responsibilities include preliminary consideration and formulation of recommendations to help the Supervisory Board decide crucial issues;
• the chairman of the Executive Board and the Executive Board itself are the executive governing bodies; they govern day-to-day activities at Moscow Exchange;
• the Internal Control and Internal Audit services oversee the effectiveness of risk management and corporate governance practices and compliance with legal requirements, corporate policies, and business processes, and also perform other functions; an independent external auditor reviews and confirms the Group’s financial reports;
• the user committees are advisory bodies of Moscow Exchange;
• the Corporate Governance Department and the Corporate Secretary coordinate the Exchange’s actions to protect shareholders’ rights and interests.

Moscow Exchange’s Corporate Governance Code is in force at the Group; it sets out core principles and objectives of the corporate governance system, including the principles of implementing corporate governance which are to be followed by the Group’s companies. A top-level approach to management approved at Moscow Exchange and then integrated at all companies of the Group. NCC and NSD strive to implement all requirements relevant to Moscow

Exchange in their activities.

Corporate Governance Code

The Corporate Governance Code sets out the main principles and objectives of Moscow Exchange’s corporate governance system.

Moscow Exchange regularly monitors and evaluates external changes and, if necessary, quickly responds to the development of legislation and corporate governance practices in Russia and abroad, including by amending its own Corporate Governance Code.

The current version of the Corporate Governance Code approved in 2019 by decision of the Moscow Exchange Supervisory Board covers several provisions related to corporate social responsibility, including:

• the procedure for conducting self-evaluation of the Supervisory Board annually and for conducting external evaluation by independent consultants every three years;
• the procedure for selecting a senior independent director;
• the succession program for members of the Executive Board;
• the procedure for managing conflicts of interest;
• sections on initiatives related to environmental efficiency, business ethics and prevention of corruption.

Governing bodies

General Shareholders Meeting

The General Shareholders Meeting acts in accordance with Russian legislation and the Charter

of Moscow Exchange.

Supervisory Board

The Supervisory Board is the main governing body of Moscow Exchange, acting in accordance

with the Charter and the Regulation on the Supervisory Board of Moscow Exchange, approved by the General Shareholders Meeting. The committees under the Supervisory Board consider sustainability-related issues in accordance with their scope of authority.

Supervisory Board members are elected by the General Shareholders Meeting to sit on the Board until the next Annual General Shareholders Meeting. The members of the Supervisory Board are elected by cumulative voting.

The competence of the Supervisory Board is defined in the Charter and is delimited from the competence of Moscow Exchange’s executive bodies, which manage its day-to-day activities. In particular, the Supervisory Board is responsible for approving the mission, strategy, and performance targets of Moscow Exchange, as well as most of its internal policies; it also takes decisions on pressing issues that affect the implementation of the strategy and the Group’s long-term development.

External and internal evaluation

As per the recommendations of the Corporate Governance Code of the Central Bank of Russia and best international practices, the Supervisory Board of Moscow Exchange self-assesses the effectiveness of its activities annually. In addition, an external evaluation involving an independent consultant is carried out once every three years; the next is scheduled for 2022.

Remuneration of the Supervisory Board members

The system of remuneration of Supervisory Board members is set out in the Regulation on Remuneration and Compensation of Expenses, approved by resolution of the Annual General Shareholders Meeting. Each Supervisory Board member is paid a fixed amount, depending on

• the Supervisory Board member’s status (compliance with the independence criteria);
• additional functions performed (as chairman or deputy chairman of the Supervisory Board);
• contribution to the work of the committees under the Supervisory Board (as committee chairman or member);
• attendance at meetings of the Supervisory Board.

As per the current legislation of the Russian Federation, the "say on pay" concept is not applicable.

Executive Board

The Executive Board manages the day-to-day operations of Moscow Exchange. The chairman of the Executive Board acts on behalf of Moscow Exchange without the need for a power of attorney. He or she represents its interests, issues orders, gives instructions mandatory for all Moscow Exchange employees, and delegates certain powers.

Remuneration of Moscow Exchange executives

The system of remuneration of Moscow Exchange executives is regulated by the Policy on Remuneration and Compensation of Expenses of Executive Body Members. The policy sets out the principles of and approaches to remuneration; it establishes the procedure for determining the amount of remuneration and the types of payments, benefits, and perks granted to executive body members. Remuneration consists of a fixed and a variable component. The variable component accounts for a significant share of annual pay.

There are plans to review and implement sustainability KPIs for Executive Board members. Consultants are not involved in determining remuneration.

The total amount of remuneration to be paid to Executive Board members is assessed by the Nomination and Remuneration Committee for compliance with the remuneration level at comparable companies, based on research purchased from leading consulting companies. Members of Moscow Exchange’s executive bodies are not paid remuneration for their work on the governing bodies of other companies of the Group.

Preventing conflicts of interest

In order to prevent conflicts of interest among members of the governing bodies, the Policy on Management of Conflicts of Interest and Corporate Disputes has been adopted. The key principles of this policy include

• the requirement that members of the Supervisory Board, members of the Executive Board, and the chairman of the Executive Board notify Moscow Exchange of conflicts of interest;
• priority of the interests of Moscow Exchange and its shareholders over the personal interests of the members of Moscow Exchange’s governing bodies;
• contribution of the Supervisory Board to the prevention, identification, and settlement of corporate conflicts;
• priority participation of independent directors in preventing corporate disputes and performance of significant corporate actions by Moscow Exchange.

A list of affiliated persons is disclosed on the Moscow Exchange website to inform shareholders and other interested parties.

See the corresponding report for information on interested party transactions made by Moscow Exchange in the reporting year.

KEY DOCUMENTS:

• Federal Law No. 208-FZ dated 26 December 1995 "On Joint-Stock Companies"

• Federal Law No. 325-FZ dated 21 November 2011 "On Organized Trading"
• Central Bank of Russia Corporate Governance Code
• Listing Rules of the Moscow Exchange
• G20/OECD Corporate Governance Principles
• Internal policies, regulations and other bylaws, including the following:

• Charter of Public Joint-Stock Company Moscow Exchange MICEX-RTS
• Regulation on the Identification and Prevention of Conflicts of Interest by Public Joint-Stock Company Moscow Exchange MICEX-RTS When Acting as a Trading Organizer and Financial Platform Operator
• Succession Policy for Members of the Supervisory Board of Public Joint-Stock Company Moscow Exchange MICEX-RTS
• Regulation on the Stock-based Long-term Incentive Program for Key Experts of Public Joint-Stock Company Moscow Exchange MICEX-RTS

Maintaining and developing a culture of trust and responsibility is a key priority of Moscow Exchange Group’s updated strategy. The Group upholds high standards of corporate business conduct and values its reputation. Particularly, Moscow Exchange adheres to the principle of zero tolerance of corruption in any form.

Key principles of the Moscow Exchange Code of Ethics:

• respect for staff and equal opportunity;
• respect for staff civil rights, including their right to freedom of speech;
• zero tolerance of corruption;
• prevention of conflicts of interest;
• combating money laundering and terrorism financing;
• countering the use of inside information;
• protection of Moscow Exchange’s assets, including intellectual property rights;
• protection of shareholders’ interests;
• non-disclosure of confidential information and protection of intellectual property rights;
• maintaining trust-based relationships with customers, partners, and government authorities;
• neutral stance towards political and religious activities (the Group’s employees are, however, welcome to engage in such activities at their own expense and as private individuals);
• corporate social responsibility and commitment to sustainability.

The Code of Professional Ethics sets out values that are fundamental to decision-making during Moscow Exchange’s activities:

• openness and decency;
• continual development and openness to change;
• partnership with customers;
• responsibility for the future of the company.

Anti-corruption

To implement the zero-tolerance principle, Moscow Exchange Group takes steps to prevent corruption. These measures are aimed at both internal and external stakeholders, including informing and training staff, developing mechanisms to obtain information on events that involve the risk of corruption, and incorporating anti-corruption provisions into contracts with counterparties.

Key principles of the anti-corruption policy

• Moscow Exchange prohibits the offering/acceptance of any items of value (including gifts and incentive payments) in soliciting assistance to solve any issues.
• Moscow Exchange prohibits transactions with third parties that would act on behalf of or in the interests of Moscow Exchange.
• Moscow Exchange has corruption risk controls embedded in all aspects of its activities.
• Moscow Exchange incorporates anti-corruption provisions (clauses) into contracts and vets all counterparties.
• Moscow Exchange provides mechanisms for its staff and third parties to report information on corruption risks (including anonymously).

Mechanisms for reporting instances of corruption and violations of standard business practices

The Group created "SpeakUp!", an intranet portal for reporting compliance-related issues, enabling the responsible officers to be promptly informed of possible instances of corruption and violations of standard business practices. The information reported is considered confidentially; the Group’s anti-corruption policy guarantees non-retaliation – official or otherwise – for those who report information. After processing, statistics on reports submitted via SpeakUp! are sent to the Audit Committee, and, if necessary, they are escalated to the Supervisory Board. Third parties can use the SpeakUp! function on the Group’s website.

Employees can also use SpeakUp! to get advice on ethical business conduct and anti-corruption.

Moscow Exchange adheres to the open-door principle; employees can also directly contact the compliance department by phone, submit questions via a dedicated email address, and use the internal compliance portal.

Information about obtaining advice on business ethics is provided to employees in the course of training on anti-corruption policies and methods.

To ensure that staff awareness of anti-corruption practices and methods remains high, Moscow

Exchange Group provides information to its personnel at several levels:

1. Upon hiring, new employees undergo a brief training course and read and sign key documents.
2. Whenever the values, principles, or behavioral standards and rules of Moscow Exchange change, staff are informed accordingly through the internal portal and other means of internal communication (the corporate magazine, posters, newsletters, etc.).
3. Supervisory Board members who are not employees of Moscow Exchange Group are introduced to new values, principles, standards, and rules of conduct when approving the relevant documents.
4. The Group also runs an internal training course that is mandatory for all employees.

KEY DOCUMENTS:

• Policy on Preventing Corruption-related Offenses
• Code of Professional Ethics of Moscow Exchange
• Code of Ethics of NSD NCO JSC
• Code of Business Ethics of NCC NCO JSC
• Policy on Preventing Corruption-related Offenses at NCC NCO JSC
• Procedure for Preventing Conflicts of Interest at NCC NCO JSC
• Moscow Exchange Information Policy
• NCC NCO JSC Information Policy
• Rules of Internal Control of NCC NCO JSC to Combat the Legalization (Laundering) of the Proceeds of Crime, the Financing of Terrorism, and the Financing of the Proliferation of Weapons of Mass Destruction
• Regulation on the Contractual Activities of NCC NCO JSC
• Information on efforts by Moscow Exchange Group counterparties to prevent money laundering and financing of terrorism
• Moscow Exchange’s Know Your Customer/Counterparty Policy
• Conflict of Interest and Corporate Conflict Management Policy

RESPONSIBLE BODIES:

• Each business unit of Moscow Exchange is responsible for identifying and assessing risks in its own processes, including corruption-related risks
• Internal Control and Compliance Department
• Audit Committee of the Supervisory Board

Moscow Exchange Group emphasizes responsible supply chain management and close cooperation with suppliers of products and services in order to ensure economically efficient of procurement and to mitigate relevant financial and non-financial risks. The Group has a vested interest in developing fair competition on the market and strives to cooperate with reliable and responsible suppliers.

Key principles of procurement

• transparent procurement: any supplier may fill out a questionnaire on Moscow Exchange’s website; auctions are held on a B2B digital trading platform;
• equality, fairness, non-discrimination, and no unreasonable competition restrictions imposed on participants in procurement: all participants, regardless of the size of their business and their country of registration, enjoy equal rights to participate if the transparency and substantive criteria are met;
• there is no additional bidding stage after the final call for bids is announced, unless there are justified changes in the terms of reference, in which case the process is treated as a new procurement;
• no provision of services by suppliers who violate Russian legislation currently in effect, including the Labor Code;
• zero tolerance for any corrupt practices.

The bulk of procurement by Moscow Exchange Group relates to IT, specifically the development, maintenance, and purchase of modern software and hardware. Due to the specific requirements of Moscow Exchange, its activities often demand unique technological solutions. In most cases, such challenges are solved by consultants and contractors. The Group contributes to boosting demand for innovative and high-tech products and services, as well as creating new jobs in the supply chain.

Supply chain risk management
 

Moscow Exchange Group always assesses economic, financial, and related-party risks associated with all its suppliers, using the latest data for verification (which should be no older than one year). Suppliers assessed to have a high level of risk are not granted contracts. If a supplier is found to be dishonest (breaching a contract or bidding requirements), they may be disqualified.

In accordance with internal regulations, the procurement documentation includes a link to the corporate portal or an email address where losing bidders can submit feedback on the transparency and fairness of procurement procedures.

To manage ESG risks in the supply chain, Moscow Exchange Group uses standard contract templates containing clauses stipulating that suppliers must comply with Russian legislation (including the Labor Code), as well as a clause emphasizing the Group’s zero tolerance for corruption and bribery. In the agreements concluded between Moscow Exchange Group and its

suppliers, the parties warrant that their employees will not offer, solicit, or consent to any corrupt payments (in cash or valuable gifts) to any persons, nor accept such money or gifts.

KEY DOCUMENTS:

• Regulation on Procurement of Moscow Exchange
• Internal regulations on interaction between Moscow Exchange and other companies of the Group

RESPONSIBLE BODIES:

• relevant departments (procurement initiation, preparation of requirements and terms of reference)
• Procurement Assurance Department (organization and implementation of procurement)
• Procurement Committee (approval of purchases exceeding RUB 6 million)
• Executive Board of Moscow Exchange (approval of purchases exceeding RUB 300 million)
• Supervisory Board of Moscow Exchange (approval of purchases exceeding RUB 600 million)