National Settlement Depository (NSD, a member of the Moscow Exchange Group) has launched a new service for professional securities market participants, namely banks and brokers that provide access to non-Russian securities trading on the Moscow Exchange.
The service helps automate the process of acceptance of the Form W-8BEN filled in by individuals to receive income from U.S. securities. Data interchange between NSD and professional securities market participants will be maintained using the OpenAPI protocol.
Using the service, banks and brokers will be able to offer non-U.S. resident retail investors an opportunity to fill in the Form W-8BEN either directly in their user account or in a mobile app.
Boris Blokhin, Head of Equity Market Department, Moscow Exchange: “The new service will make trading in non-Russian securities much easier for retail investors and also help professional trading participants reduce their client service costs in that market segment. The Tax Code amendments proposed by the bourse will, down the road, allow brokers to act as withholding agents for dividends paid on non-Russian securities, which will provide even more benefits to brokers and their clients.”
Denis Buryakov, Managing Director, Head of Depository and Clearing Services Center, NSD: “We have made the life of retail investors much easier. Now, brokers can sign up for the service that enables individual investors to file the Form W-8BEN through their user account or the broker’s mobile app to certify their entitlement to tax benefits. In addition to the clear convenience offered to users, the solution also meets the relevant security and availability standards. Investors don’t need to worry about security of their data.”
Trading in non-Russian securities in Russian rubles was launched on the Moscow Exchange in August 2020. With effect from 27 September 2021, market participants and their clients can trade non-Russian securities in U.S. dollars. In total, 281 securities are available to investors. On 1 October, the number of available non-Russian stocks will increase to 361, while reaching 500 by the end of this year. 76 brokers and banks offer their clients an opportunity to trade non-Russian securities on the Moscow Exchange.
Non-Russian securities are traded and settled using the Moscow Exchange’s secure infrastructure, involving qualified central counterparty’s services and securities safekeeping at the central securities depository. Stock dividends are paid in the original currency (e.g., for U.S. securities – in USD).
Retail investors may file the Form W-8BEN required to calculate tax on dividends paid on U.S. securities.