NSD Sums Up Q1 2019 Results

• The value of securities under custody reached RUB 46.2 trillion
• NSD became the first CSD to sign up for SWIFT’s gpi service

Central Securities Depository (CSD) services

In Q1 2019, the value of securities under custody reached RUB 46.2 trillion – this was a 10% increase as compared with the same period of 2018 (RUB 42.2 trillion). The number of foreign securities issues serviced by NSD grew 36% – from 9.6 thousand to 13.1 thousand. The total number of securities issues serviced by NSD grew 22% – from 16.8 thousand in Q1 2018 to 20.6 thousand in Q1 2019.

The number of inventory operations in the CSD increased 8% Y-o-Y and reached 866 thousand operations in Q1 2019 (compared with 798 thousand in Q1 2018), including 676 thousand exchange trade operations (+12%; 603 thousand operations in Q1 2018) and 190 thousand OTC trade operations (-3%; 196 thousand operations in Q1 2018).

In Q1 2019, the number of OTC DVP transactions increased and amounted to 55.9 thousand; this was 4% more than in Q1 2018 (53.7 thousand).

In Q1 2019, one more company – VTB Capital Investment Management – began using the centralized system for record keeping of mutual fund units (NSD’s Mutual Fund Distribution Platform). Currently, 12 brokerage companies/nominees and nine asset management companies use this service.

Corporate Actions (CAs)

In Q1 2019, 581 meetings of securities holders were held using the E-voting technology. 56 corporate actions to repurchase shares and 7 corporate actions to exercise the pre-emptive right to purchase shares were also initiated. In Q1 2019, the total value of repurchased shares reached RUB 88 billion.

In total, 3,254 corporate actions involving Russian securities were conducted in Q1 2019. It was 3% more than in the same period of the previous year (3,153 corporate actions in Q1 2018). In Q1 2019, the number of corporate actions involving foreign securities continued to grow due to the increase in the number of securities issues serviced by NSD (from 5,549 issues in Q1 2018 to 7,564 ones in Q1 2019). The growth amounted to 36%.

Collateral Management (CMS)

In Q1 2019, the value of Federal Treasury repos conducted via NSD’s CMS amounted to RUB 5.3 trillion; it was 4.9 times more than in Q1 2018; the average repo maturity increased from 3 to 7 days. Among one of the factors which resulted in the increase in the value of Federal Treasury repos was conducting repos with floating rates linked to RUONIA. In Q1 2019, the total volume of Bank of Russia repos reached RUB 192 billion. The total number of clients connected to the CMS was 160. 

In late 2018, a Single Account service was launched by the Moscow Exchange Group. The new service allowed to automate standard asset transfers between client positions in NSD and NCC. Since the launch of the Single Account, 12 clients connected to the service. In the reporting quarter, the number of automatic asset transfers using the Single Account service reached 573. The most popular service was the automation of securities transfers following the settlements via NSD clearing procedures to trading securities accounts opened for clearing in NCC based on NSD infrastructure.

Repository

In Q1 2019, the number of trades registered with NSD’s Repository grew to 3.1 million (compared with 2.8 million in Q1 2018). The value of the registered transactions was 20% more than in the same period of 2018 – RUB 120.8 trillion (RUB 100.6 trillion in Q1 2018).
In Q3 2019, the top 3 instruments of registered transactions included:

The top 3 instruments in terms of the volume of reported transactions included (RUB trillion):

The number of cancellations of erroneous messages reduced 44% (from 30,972 to 17,273 messages).  Meanwhile, the largest percentage of canceled messages (9,791) was attributed to the end of planned deadlines for executing documents (30 days). 

In Q1 2019, NSD completed the technical preparation of the electronic platform allowing to open bank deposits remotely which was a part of the Marketplace large-scale project. In the project’s architecture, NSD acts as a Regulator of Financial Transactions (RoFT), a reliable environment for safekeeping and recording client transactions concluded via the platform. The platform will be made available to clients after necessary legislative amendments are passed.

Information services

In Q1 2019, the number of contracts concluded with information service users grew 23% Y-o-Y and reached 557 contracts. The highest growth of the number of users was demonstrated by NSD’s Valuation Center – 38% (190 clients in Q1 2019 as compared with 138 users in Q1 2018).
In January 2019, PRIME, a Russian business news agency, became an official distributor of NSD Valuation Center’s products. Now, PRIME clients can receive theoretical fair prices as part of the package “NSD VC’s Financial Instrument Fair Values.”

NSD launched the GetNews service allowing users to download news related to corporate actions, securities and organizations. The service’s users can now use the wide range of information services: they can download and view only the necessary messages, and create news feeds on their own online resources.

In Q1 2019, NSD presented a new product allowing to calculate fair values of Eurobonds issued by the Russian Ministry of Finance. 

Payment and Settlement System

In Q1 2019, the value of money transfers reduced 12% and reached RUB 71.1 trillion (RUB 82.2 trillion in Q1 2018). The number of client transactions amounted to 264 thousand or 4% less than in Q1 2018 (276 thousand).

National and Substitute Numbering Agency, and the accredited Local Operating Unit (LOU)

NSD is the first and only company in Russia and the CIS countries that has received an accredited LOU status. This is a permanent status which replaced the temporary one (pre-LOU). It confirms NSD’s compliance with GLEIF’s regulatory and technological requirements for an organization which assigns and maintains LEIs.

In Q1 2019, NSD assigned 31 new LEIs and verified 130 LEIs. LEIs assigned by NSD are recognized by regulators, market participants, and LOUs of other countries. NSD continues to act as Russia’s Numbering Agency and as the substitute numbering agency for CIS countries, assigning ISINs, CFIs, and FISNs.

In Q1 2019, NSD assigned 273 ISINs, CFIs and FISNs to Russian financial instruments, and qualified 1,528 foreign securities.

IT services
As the core of the financial market, NSD gives particular attention to developing a reliable IT platform, implementing partnership programs, and ensuring a high level of information security.

In Q1 2019, NSD summed up results of the first year of operation of its Transit 2.0 platform by organizing the special workshop for the potential users of the platform. Specialists from major corporations and banks, and representatives of the Russian Association of Corporate Treasurers took part in the event. Transit 2.0 is a system allowing banks and corporations to maintain the automatic exchange of financial messages and other documents. The platform was launched over the past year; its main task was to reduce costs of corporations and banks during their operational interactions by unifying and standardizing the processes for exchanging financial messages. In Q1 2019, Gazprombank, Uralsib Bank, and the United Metallurgical Company joined the platform.  

In Q1 2019, four new users connected SWIFT services via NSD’s SWIFT Service Bureau, and the total number of users reached 70.

Service Bureau clients’ average daily traffic decreased 10% Y-o-Y and reached 290,165 messages per month.

NSD became the first CSD to sign up for SWIFT’s global payment innovation (gpi) service. The gpi solution allows for rapid cross-border real-time payments, lets users track their payments, and ensures transparency of bank fees and foreign exchange rates. NSD is also planning to offer gpi service to its clients as part of the Service Bureau model.