Russia’s Central Securities Depository, depositories and registrars ran a corporate actions test. By Ksenia Liskina, Relationship Manager, GSS Russia
In preparation of the Federal Laws On Joint Stock Companies and On the Securities Market, which will come into effect on 1 July as part of the corporate actions reform, market participants performed a successful first test run. It encompassed the full information and documents exchange during a shareholder-requested purchase (buyout) of company shares (BIDS) using electronic communications channels.
Participants in the test were NSD depositors (including UniCredit Bank), registrars (SR-DRAGA) and a registrar software developer. The NSD and market participants gave a positive assessment of the first test results and confirmed their intention to continue joint work on improving interactions associated with corporate actions processing.
The provisions of the new Laws foresee that owners of securities kept with a depository will be able to participate in most corporate actions only through their depository. Information on corporate actions will be cascaded by the issuers through the NSD to the depository and their clients. The depository in return will pass applications for participation in corporate actions through the NSD back to the issuers. The cascading principle will also be applied to all payments related to corporate actions.
The current tests are to prevent errors during corporate action processing and guarantee the reliability of the new technology to the securities holders. The NSD plans to continue to test other corporate actions in light of the forthcoming changes that arise from the reform.