Euroclear Bank said its post-trade services for Russian government short-term commitments, or Obligatsyi Federal’novo Zaima (OFZs), one of the most actively traded classes of Russian government bonds, will commence on 7 February.
Through Euroclear Bank’s account with Russia’s central securities depository (CSD), the National Settlement Depository (NSD), all of the major international firms trading OFZs will be able to settle those trades and deposit their OFZ positions with Euroclear Bank. All Russian regulatory and operational clarifications have been received.
The service will begin with over-the-counter (OTC)-traded OFZ transactions, followed by stock exchange-traded transactions in March 2013. The Euroclear Bank/NSD link will also enable clients of each depository to settle cross-border transactions easily.
“The 7 February milestone will mark a new era in the ability of Russia to fund its growth and development through the international capital markets,” said Frederic Hannequart, chairman of Euroclear Bank. “Industry experts are predicting new foreign capital inflows to Russia in the region of roubles (RUB) 615bn [US$20bn]. Euroclear Bank is proud to become part of the new Russian Financial Centre by making OFZs eligible for Euroclear services."
Eddie Astanin, the NSD’s chief executive officer (CEO) added: “We have worked with colleagues at the Bank of Russia, Russia’s Federal Financial Markets Service [FFMS] and the Russian Ministry of Finance to make the necessary legislative changes that will greatly enhance the appeal of Russian federal bonds.
“Together with Euroclear Bank, NSD is offering the government of Russia a broader, cheaper and more efficient way to fund the country’s growth through the bond markets. A tremendous amount of work has been done to accelerate the process of fulfilling the necessary requirements for an effective cross-border service for OFZs. I am delighted that February 2013 will be remembered as the point when Russia opened its capital market to the world."
Euroclear Bank said that the service for OFZs traded OTC is the first of a progressive suite of services that will cover exchange-traded OFZs and other Russian fixed-income securities (corporate and municipal bonds) in the coming months. OFZs held in safekeeping by Euroclear Bank will also be eligible as securities collateral for securitised transactions where the bank is the triparty collateral management agent.