Supporting market development in Russia
Natasha Sidorova, Head of Global Securities Services at UniCredit Bank, has been re-elected as the Chairwoman of the NSD Customer Committee for Quality Control and Risk Management for another year.
The Committee addresses issues related to the mitigation of operational risks of NSD, the stable functioning of its infrastructure and adequate business continuity. Members also discuss proposals for the improvement of the quality of services rendered by NSD, review results of the client satisfaction surveys and share any concerns they may have with regard to NSD performance.
Central bank initiative on potential infrastructure changes on the Russian securities market
Recently, UniCredit Bank participated in a meeting of professional market participants to discuss the Bank of Russia initiative. The gathering, organised by the Bank of Russia and major self-regulating bodies, was to discuss potential changes in the basis of the functioning and regulating of the infrastructure elements of the Russian securities market. Those novelties were described in a “Report for public consultations” written by the Bank of Russia.
The meeting was well attended and included, apart from the regulators, quite a number of representatives from the expert community including registrars, custodians, asset management companies, specialised depositories and economists.
The main topics discussed on the basis of the Bank of Russia report were the following:
- Analysis of the existing infrastructure levels and the functions of its elements and considerations with regard to the proposed gradual transition to the merge of licenses for custody activity and for keeping a register (the latter currently being exclusive). It is assumed that the single license would allow any infrastructure institution (registrar or custodian) to certify rights on the Russian securities. Moreover, under one license, different rights may be provided (depending on the ability of an institution to comply with certain requirements).
- The authors of the report suggest discussing the balance of interests, rights, duties and responsibilities of issuers, registrars, custodians and investors, in order to define the necessity for the respective changes and the conditions under which the Bank of Russia can waive its requirements towards regulation of the registrars’ tariff policy.
- The report considers proposals that promote the development of securities lending with the participation of infrastructure institutions.
- The Bank of Russia also proposes to introduce segregated securities accounting up through the final beneficial owner at the custodial and registrars` level, to ensure better protection of the rights of the underlying investors.
The meeting participants were almost unanimous and expressed the general opinion of the expert community that the initiative for the radical transformation of the infrastructure cannot be economically substantiated and does not seem to be appropriate.
Besides, the initiative does not take into consideration the specifics of various infrastructure organisations and the development of modern financial digital technologies. At the same time, it is expected to increase operational and concentration risks as they relate to the infrastructure.
Mariam Sarkisyan
Relationship Manager
Global Securities Services Russia
mariam.sarkisyan@unicredit.ru