National Settlement Depository (NSD), Russia's central securities depository, has launched new electronic matching services for OTC transactions. Now the company's clients can receive information about potential counter instructions for OTC transactions with securities.
In many cases, participants in OTC transactions have to spend a lot of time searching for a counter instruction if the parties’ instructions for settlements do not match (for instance, if the parties indicated different number of securities or failed to put the correct sum of the transaction); they also have to connect with the counterparty directly and agree on each transaction’s parameters.
The new electronic matching services will allow NSD clients to speed up the process of searching counter instructions for settlements: the system compares all instructions automatically. It also reduces the time needed to make corrections in the instructions; the clients will be informed which field in the instructions does not match.
The project’s stages
The new services will be launched in several stages. At the first stage, on 17 November 2014, the new services of electronic matching were launched – electronic matching by “transaction date”, reports on matching by “transaction date”, and transferring full information about the counter instruction through SWIFT or NSD’s own channels.
On 22 December 2014, a Hold & Release mechanism will be launched allowing instructions to be sent with the "Only for Matching" preliminary status (the counter instructions will be matched without making a transaction). The new mechanism will be available for use at all stages of the instruction processing until the date of settlements on the transaction.
At the next stages of the project, in 2015, the company will provide an ability to use alternative brief identifiers for depository accounts during interactions with NSD. The services launched at the first stage will be improved as follows:
- electronic matching for FOP and DVP transactions will be available;
- alternative ways to sign up for the service will be provided;
- clients will receive notifications if the only counter instruction is cancelled or reconciled.