Euroclear Bank’s post-trade services for Russian corporate and municipal bonds will commence on 30 January 2014. Via Euroclear Bank’s account with Russia’s central securities depository – National Settlement Depository (NSD) – all Euroclear Bank clients investing in corporate and municipal debt will be able to settle those trades and deposit their positions with Euroclear Bank.
This new service complements NSD and Euroclear Bank’s offering for Russian government bonds, known as OFZs, which was launched in February 2013. Municipal bonds and corporate bonds issued in 2012 and later are eligible for the service.
The Minister of Finance of the Russian Federation Anton Siluanov commented on this important event for the Russian financial market: “We have been working in cooperation with NSD and Euroclear to launch the post-trading services for the Russian corporate and municipal bonds. We endeavour to attract investors, to make our market more transparent and to raise interest in Russian securities. Great work has been done and significant changes have been introduced to the Russian legislation, and in particular to the Tax Code, to the Law “On the Securities Market”, and the Law “On Joint Stock Companies”. I am confident that this is an important step towards establishing an International Financial Centre in Moscow that aims at providing better accessibility and lower cost of long-term financing for Russian companies.”
Frederic Hannequart, Chairman of Euroclear Bank, said: “Following on from the success of our OFZ service, we are delighted to now offer services for municipal and corporate assets. The growing appetite shown by investors to mitigate risks while ensuring a solid return on their diverse portfolio of assets is now further enhanced with access to many of Russia’s companies. Furthermore, foreign firms can also be important stakeholders in the development of key municipal infrastructure programmes.”
Hannequart continued: “I would like to thank the Ministry of Finance of the Russian Federation and our partners at the National Settlement Depository for their assistance and guidance as we together forge ahead in the creation of more liquid and efficient capital markets in Russia.”
Eddie Astanin, Chairman of the Executive Board of the National Settlement Depository, commented: “The launch of new post-trade services for Russian corporate and municipal bonds has been made possible by recent changes in Russian law and, in particular, the Tax Code, the Law “On the Securities Market” and the Law “On Joint Stock Companies.” These regulatory changes were achieved through NSD’s active participation. We are confident that the development of post-trade technologies, one of which is the link between Euroclear Bank and NSD, and improved regulation will stimulate investors’ additional interest in Russian issuers’ securities.”
Euroclear Bank’s service for OFZs - and now corporate and municipal debt - is part of a progressive suite of services which aims to expand Euroclear Bank clients’ access to Russian securities, including a service for Russian equities which is scheduled to go live in the second half of 2014.
OFZs, corporate and municipal securities held in safekeeping by Euroclear Bank will also be eligible as securities collateral for securitised transactions where Euroclear Bank is the triparty collateral management agent.
Euroclear Bank has links with CSDs in 45 major countries. The Russian rouble is already one of 54 settlement currencies in Euroclear Bank.
As of today NSD has links with CSDs/ICSDs in eight countries and with 12 cash correspondent banks. That allows NSD clients to settle Free-of-Payment and Delivery-versus-Payment securities transactions in Eurobonds, non-domestic bonds and equities, DRs, ETFs and certain other instruments, while cash settlement is available in eight foreign currencies.