The Russian CSD National Settlement Depository (NSD), launched the electronic matching of OTC transactions on November 17, 2014. ZAO UniCredit Bank (ZAO UCB) has registered as a participant in the new process. Starting from November 21, 2014 ZAO UCB will receive MT548 with information on the most relevant potential instructions, sent by the counterparties from NSD, and automatically forward them to the clients on a real time basis.
As informed in the Newsflash from October 31, 2014, instructions will be considered as potentially matching only if one field in the counterparties` instructions differs. Electronic matching will be “trade date driven”, i.e. matching of the field “trade date” in the instructions will be obligatory.
On December 22, 2014, NSD plans to implement the second step of the electronic matching: the “Hold and Release” functionality. This functionality permits market participants to put the instructions submitted to the NSD ‘on hold’, until all required settlement conditions are met, and then ‘release’ it for settlement.
The electronic matching will replace the existing manual process in which the market participants pre-match settlement instructions via telephone or e-mail, resulting in a significantly increased STP rate on the Russian OTC market.
Starting from 2015, in case of receipt of the instructions which are not compliant with the previously provided STP formats, ZAO UCB will cease manual repair of such instructions based on information received through telephone or e-mail pre-matching. ZAO UCB will advise the clients on the non-STP instruction via MT548 REPR. Clients will have to cancel the non-STP instruction and replace it with the new STP formatted instruction.
Please contact your Relationship Manager at ZAO UniCredit Bank for any questions related to the provided STP format of MT540 -543.
ZAO UCB will keep you informed on the details and the schedule of the implementation of the further enhancements.
Impact on investors: Electronic matching will reduce operational risks and risks of failed trades, achieving much higher rate of Straight Though Processing. Clients will be required to adjust the formats of their instructions to STP-format by January 1, 2015.
Related Newsflashes: NSD starts electronic matching of OTC trades in November 2014.