National Settlement Depository (NSD), Russia’s central securities depository, is taking steps to improve regulatory and IT aspects of corporate information collection and distribution, as well as corporate actions processing.
Such steps will contribute to:
- the establishment of a data center in the Russian Federation to store and distribute official, reliable information on corporate actions;
- representation by securities depositories of their clients (depositors) in the course of corporate actions in accordance with laws;
- standardization of corporate procedures and introduction of universal document formats;
- an environment in which investors will be able to exercise the rights attached to any securities held by them as efficiently as possible;
- the widespread use of electronic data interchange in accordance with international standards for the purposes of corporate information collection and distribution, as well as for corporate actions processing;
- the use of straight-through processing of information at the level of securities depositories and registrars in the Russian securities market;
- the introduction of electronic voting at general meetings of security holders in the Russian Federation, both through securities depositories and registrars (e-proxy voting) and directly (e-voting);
- ensuring that Russian stock market instruments are accessible to foreign investors, as well as to international settlement organizations and central securities depositories;
- improved corporate governance; and
- making the Russian securities market more appealing to investors.
To improve communication between securities market participants in the course of corporate actions, NSD devises:
- business models and process flowcharts for various corporate actions; and
- message attributes and electronic document formats to be used by securities market participants in the course of corporate actions.
For the purpose of devising the above, NSD takes into account the following:
- Classification of corporate actions described in the ISO 15022 and ISO 20022 standards.
- The use of the ISO 20022 standard in electronic data interchange with securities market participants.
- The possibility to use the ISO 15022 standard for communication with NSD’s clients via SWIFT.
- International standards of disclosing information on corporate actions and principles of corporate actions processing, subject to specific features of the Russian securities market, in particular standards devised by:
- Securities Market Practice Group;
- International Securities Services Association;
- Corporate Actions Joint Working Group;
- Joint Working Group on General Meetings;
- The International Securities Market Advisory Group;
- The European Commission’s Clearing & Settlement Advisory and Monitoring Expert Group; and
- International Securities Association for Institutional Trade Communication.
When drafting documents, NSD also takes account of opinions and experience both of NSD’s employees and securities market participants, for which purpose a broad spectrum of parties will be involved in the drafting and discussion processes.
The outcome of the corporate actions reform being implemented in the Russian Federation will be a technology based on recognized international standards, which will allow for:
- collecting, processing, storing, and distributing reliable corporate information for various user types in accordance with recognized international standards;
- processing corporate actions through securities depositories and registrars by using standardized electronic messages, and maintaining efficient communication in the course of corporate actions; and
- efficiently and automatically processing considerable amounts of information (in line with the needs of the Russian financial market).