MOEX to implement New Functionalities to the Securities Market

Moscow Exchange (MOEX) announced a number of new functionalities for trading and settlement of bonds and equities, to be introduced from 27 April 2015. These including the following:

• A new system for large stake OFZ trading is being implemented, allowing trade participants to execute large orders at the average market price, thereby reducing their transaction costs. Such trading will be carried out via discrete auctions held twice a day, from 11:47 to 12:00 and from 16:47 pm to 17:00 (local times). The concentration of the liquidity in two short auctions will reduce the time for execution of large orders.
• The discrete auctions for equities will also be changed - they will be run once or twice a day (currently only once a day) and only for equities included in the MICEX Index (currently for all Level 1 List equities). Equities will continue to be available for large stake trading and repo transactions with the CCP during the auctions.
• Foreign securities will become technically eligible for settlement in USD, in addition to RUB. The exact date of admission of such securities to trading in both currencies will be subsequently announced by MOEX.
• The list of securities admitted to trading without full prefunding will be expanded due to the differentiation of securities into such "eligible as collateral" and "admitted to trading without full prefunding". To be eligible as collateral, securities must meet the criteria set for trading with Central Counterparty such as credit rating and be included in the Lombard List of the Bank of Russia or the MICEX Index.
• Cross trading will be launched for underlying clients of the same market participant provided that such trades are made via the Central Counterparty. The cross trades will be allowed in the central order book and the negotiated trading modes. The market participants will be responsible for granting permission for cross trading to clients on an individual basis.
• MOEX plans to offer trading in bonds denominated in CNY and GBP with settlement in these currencies.
• To coordinate MOEX clearing with the Central Bank payment batches, the intraday clearing session for equities and bonds will start one hour later, at 17:00 local time.

Impact on investors: The launch of the new functionalities by MOEX will allow market participants to reduce costs and speed up securities settlement.