Source: National Settlement Depository
National Settlement Depository (NSD), Russia’s central securities depository, a part of the Moscow Exchange Group, has initiated a program of corporate actions reform in the Russian market with the support of the regulator, issuers, registrars and clients. The reform is aimed at implementing new technologies and international standards on the basis of the electronic document interchange.
The reform provides for complex changes related to the legal base and technologies of the corporate actions processing. Market participants will be able to mitigate risks and reduce costs associated with corporate actions by eliminating the use of traditional paper documents, using electronic technologies and involving recordkeeping institutions.
By the end of 2014, the company will be able to inform clients about upcoming meetings of shareholders using ISO 20022 and ISO 15022 messages. By May 2015, it is planned to complete the automation of an e-proxy-voting procedure; conditions for implementation of e-proxy-voting were created in August 2014, after adopting the regulations that allowed depositories to form electronic voting documents for their clients without the power of attorney.
Eddie Astanin, Chairman of the Executive Board, NSD, pointed out: “The corporate actions reform represents one of the most important transformations in the Russian financial market, along with the creation of the central securities depository and the opening of foreign nominee accounts, that played the key role for allowing the major global players - Euroclear and Clearstream - to enter the Russian market; in its turn, all this allowed foreign investors to gain direct and convenient access to the Russian market. The opportunity to execute rights on Russian securities in a centralized way and in an electronic form will create a complex effect in the domestic market.
Infrastructures will get a chance to reduce their costs for paper document interchange, and local players will be able to execute their rights in a modern and convenient way. Availability of the newest corporate actions formats approved at the international level will encourage foreign investors to make decisions in favor of the Russian market. This is an enormous responsibility, and we will exert every effort to implement the reform in the most consistent and efficient way.”
Meeting of shareholders and the e-proxy-voting system
A change in procedures associated with conducting shareholders’ meetings is the first step of the corporate actions reform. In 2014, the opportunity to use e-proxy-voting during meetings of shareholders was legally guaranteed.
NSD in cooperation with securities market participants has already introduced both e-proxy-voting and shareholder meeting notifications using the messages in the formats developed by NSD. Currently, the e-proxy-voting technology is being modernized in accordance with international interaction standards: the company plans to introduce international formats for AGM notifications, and to provide new services allowing to take part in a meeting using the EDI.
Corporate Information Center
NSD actively works on creating a Corporate Information Center that should raise the competitiveness of Russia’s post-trading infrastructure to the level of leading international infrastructural organizations and make the Russian market more attractive and convenient for both foreign and local investors.
In 2014, NSD presented a suite of information services based on GoldenSource Corporation software. The Center’s technological platform allows the creation of various information products, tuning individual schedules of information distribution and sending data through electronic telecommunications channels in accordance with the users’ individual requests. The full scale launch of the project is planned for 2015. NSD is also participating in the legal base development and intends to expand considerably the range of services and develop new ones.