National Settlement Depository, the Russian CSD, will launch the first step of electronic matching of OTC transactions in November 2014.
Before settlement date NSD will automatically search for the most relevant counterparty instruction among the instructions received from the various participants. When the most relevant potential instruction is found, NSD will release an MT548 to the participants which ZAO UniCredit Bank in its turn will forward to the clients on a real time basis.
Instructions will be considered as potentially matching in case only one or two fields from the below table differ. Each field will be assigned with a specific "weight". Instructions with maximum "weight" against each other will be considered as relevant.
Free of Payment Instruction:
- Account number
- Sub-account number
- Settlement date
- Trade date
- Direction of trade
- Number of securities
Versus Payment Instruction:
- Account number
- Sub-account number
- Settlement amount
- Settlement date
- Currency of settlement amount
- Trade date
- Direction of trade
- DVP type
- CED trade
- Number of securities
In December 2014, NSD plans to implement the second step of the electronic matching process, the Hold and Release functionality, which permits the market participants to put the instructions submitted to NSD 'on hold' until all required settlement conditions are met, and then to 'release' it for settlement.
The electronic matching will replace the existing manual process where the market participants pre-match settlement instructions via telephone or e-mail and this will result in a significant improvement of the STP process on the Russian OTC market.
ZAO UniCredit Bank will keep you informed of the details and the schedule of the enhancements' implementation.
Impact on investors: Electronic matching will reduce the operational risk and the risk of trade failures and will enable a substantially higher Straight Through Processing rate.