The MICEX Group launches new modes of trading with partial coverage and a central counterparty in its stock market

The MICEX Group launches new modes of trading with partial coverage and a central counterparty in its stock market

15/02/10

New trading modes involving a central party and based on preliminary partial deposition of funds and T+n settlements (the “MICEX +” project) were launched in the MICEX stock market on 15 February, 2010. The new trading modes were added to the existing ones. The MICEX acts as the central counterparty (CC) for all transactions conducted in the new modes.

The “MICEX +” project is being implemented in the framework of the MICEX Group’s Development Strategy for 2009–2011. The goal is to enhance the possibilities of participants in the Russian stock market and attract new investors. The implementation of the project will be an important step towards the introduction of single clearing in all markets of the MICEX Group.

Participants in trading on the MICEX SE will be able to conduct transactions in the following modes: “CC (central counterparty) – the Main Trading Mode”, “CC – Negotiated Deals Mode” and “CC-Repos”. Trades in the new trading modes will be made in the most liquid stocks (from the composition of the MICEX Index) and bonds with a high reliability rating.

The technological innovation of the “MICEX +” project is centralized clearing and guaranteed fulfillment of obligations under transactions. The project enables market participants to use both cash and securities as partial coverage.

According to the MICEX Vice-President Igor Marich, “the new trading modes involving a central counterparty expand the trading possibilities of market participants, reduce their costs and create appropriate conditions for attracting and placing funds and securities in anonymous mode “CC-Repos” with a minimum level of risk, which actually means that a centralized repo market has emerged in Russia.