MICEX and RTS Index Committees approve the main principles of integration of stock market indices

MICEX and RTS Index Committees approve the main principles of integration of stock market indices

22/09/2011

The joint meeting of the MICEX SE’s Index Committee and the RTS Index Committee, held on September 22, discussed the principles and stages of integration of the MICEX and RTS indices. During the discussion, participants in the meeting worked out recommendations and agreed on the main actions to be taken in respect of both index exchanges.

It is planned that in the first stage, in the framework of the merger of the MICEX and the RTS until the end of 2011, the RTS indices will be transferred to the MICEX. The MICEX SE will act as the operator for the calculation of all indexes and their support. The MICEX will be selling the rights to use the indices in derivative products and services. The RTS indices will be calculated at the prices of trading modes Standard and Classica, as it is done today. To convert ruble prices into USD is intended to use information on trading in the MICEX forex market. The families of the MICEX and RTS sectoral indices will be transformed into a single product line with a single calculation procedure.

The index committees approved the extension of the time of the calculation of the MICEX Index till 23:50 as a result of using the prices of the evening session RTS Standard. The MICEX Index will be used as a stock market index for the purpose of suspending trading in securities in the combined stock market.

The activities aimed at harmonizing the MICEX and RTS indices and indicators include the unification of the approach to the determination of free-float in all indices. It is intended to use the information of anonymous repo RTS Standard in the calculation of the repo rate indicators (MICEX EQRR).

In the second stage, during 2012, it is planned to study users’ demand and preferences with respect to the target configuration of the family of indices. The study will help to transform the existing indices into a single family, develop uniform rules and a single technology platform for the calculation of indices and work out the basic principles of promoting and selling the index information.

The single family of indices will be formed in the third stage, that is, in late 2012 - early 2013's. It is assumed that the basic indices of the new family will be the "narrow" ruble index of "blue chips", comprised of 15 to 30 securities, and the "wide" benchmark covering at least 80-90% of the capitalization of the Russian market. Both indices will be used to develop the instruments of the derivatives market and other derivatives, including index funds. The family of indicators will include several lines of stock indices: sectoral, capitalization, regional, thematic indices, as well as indicators of the debt, money and derivatives markets. The main goal of the work is to ensure a smooth changeover to a new family of indices combined with the improvement of the characteristics of the products available to the RTS and MICEX.