Russian Trading System introduces central counterparty for securities

Source: Russian Trading System

Beginning 17th of September 2007 Non-commercial Partnership RTS becomes a Central Counterparty for the trades executed on the Order-Driven segment of RTS Classic Market.

Central Counterparty (CCP), a technology widely used by the world leading exchanges, will be available for Russian securities market for the first time. CCP provides anonymity of settlement, increase reliability of settlement and gives new opportunities to the RTS market participants and their clients.

NP RTS is the most capitalized organization in the RTS Group and the clearing house for the securities market. To cover the market risks NP RTS maintains its own guarantee fund which is to be increased before CCP starts. Now market participants will have to open a limit to just one counterparty thus significantly decreasing operational costs to establish KYC and AMD procedures.

Introducing a CCP for the RTS Classic will;
  • solving the bilateral limits problem;
  • allow Russian residents to use DVP settlement with US dollar payments;
  • allow RTS to execute trades on receiving two counter-orders from the same broker if the orders are submitted on account of different clients;
  • provide a Direct Market Access to RTS Classic Market for domestic and international investors;

CCP-based settlement technology will expand the list of market participants and their clients trading in RTS, increase the quantity of trades and the trading volume thus improving the liquidity of the market.

The same model is being used on the RTS derivatives market for more than 10 years. CCP already proved its effectiveness and reliability and now will be available for securities on the RTS Classic Market.

"Introducing a CCP is the first step to build a securities market compliant to the best international standards and the requirements of market participants. We plan to develop a unique trading platform with no prior deposits which will combine advantages of the RTS Classic Market and simplicity of RTS T+0 Market. The new market will be demanded by all categories of investors - Russian and international", - says Roman Gorunov, CEO of RTS.

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