New directives on internal policies and procedures at the CSD were passed by the Bank of Russia.
In late 2018 the Bank of Russia published two regulations aiming to amend the requirements regarding internal audit, internal control and risk management policies and procedures of the Central Securities Depository (CSD).
The new directives were elaborated on in cooperation with market participants; in particular, they were discussed at the Quality Control and Risk Management Committee of the NSD chaired by Natasha Sidorova, Head of Global Securities Services at UniCredit Bank.
In short, the new directives contain the following:
Directive 4904-U defines the requirements for the internal control and internal audit procedures of the CSD. The regulation, in particular, introduces the obligation of the CSD to appoint an internal control officer or establish an internal control functional unit and develop the internal control rules; specifies the requirements to the internal audit rules and the schedule of the internal audit inspections in the CSD.
Directive 4905-U stipulates the requirements for the risk management activities of the CSD. The CSD shall perform identification, assessment, control and management of the operational, custodial, credit, and market risks in compliance with this regulation.
Both regulations will come into effect as of 30 May. By that time, the CSD shall update its internal rules and procedures in compliance with these Directives.
Head of Global Securities Services Russia