Moscow Exchange Starts Trading The First Ever Russian Mortgage Certificates

22/05/2013

Today the Moscow Exchange welcomes mortgage-backed participation certificates* "ISU-1" managed by GFT CAPITAL Asset Management Company on its quotation list A1 intended for top securities. The securities represent a new instrument on the Russian financial market. On May 22, 2013 they will start to be traded on the Moscow Exchange's Securities market.

The mortgage participation certificates "ISU-1" are the first securities of such type ever registered in Russia and admitted to on-exchange trading. They are popular among different types of investors, from insurance companies to non-government pension funds, as they provide regular income generated by payments made by bank borrowers under mortgage contracts.

"Participants of the Russian stock market have obtained a new and very interesting tool that is in demand with the investment community worldwide", said Anna Kuznetsova, Managing Director of the Securities Market at the Moscow Exchange. "The Moscow Exchange possesses all infrastructure required to make the mortgage participation certificates convenient, liquid and attractive asset".

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*An opportunity to include "ISU-1" into the quotation list of the Exchange has emerged due to amendments made by the Russian stock market regulator, the FFMS, to the Regulations on Activities for Organization of Trading on the Securities Market. According to the amendments introduced mortgage participation certificates may be added to the top quotation list A1 at once provided that size of mortgage coverage exceeds RUB500 mn.

Mortgage participation certificates are intended primarily to receiving "quick" money by banks owning the right of claim under credit mortgage-backed agreements through selling the certificates to investors. Mortgage participation certificates are used as follows: a bank executes a trust management agreement. The asset management company gives the bank mortgage participation certificates and then accepts borrower's payments and transfers money to the certificates holders taken out of such payments.