Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 6

Convergence of Securities Systems, both within countries and across borders, should be encouraged where this eliminates operational risk, reduces cost and enhances market efficiency.

1.	Is the depository linked electronically and in real time with other segments of the core market infrastructure (e.g. trading platforms, netting systems, matching platforms, payment systems)?	NDC is linked electronically with MICEX trading and clearing systems DCC and VTB have no direct electronic linkage with trading or clearing systems.
2.	Is there one or more depository or settlement system in the market?	Every stock exchange tend to have its own authorised depository. There are three major depository organizations in the Russian market: NDC, an authorised depository of MICEX, where GKO/OFZ ( RUR denominated government bonds/bills) and some of the corporate securities are traded and settled; VTB is a settlement depository for USD denominated government bonds (MinFin bonds) with over 80% of this market segment immobilized there; DCC is used by the electronic trading system (RTS) brokers for settlement of their trades.
3.	If there are several, has a consolidation been considered? If yes, by when?	The possibility of consolidation of the depositories is being discussed by the market participants, but no measures have been undertaken. However, a bridge set up between DCC and NDC in 1999 allows settlement through both depositories (similar to Euroclear and Clearstream). DCC and NDC link through settlement accounts opened in each other's systems (i.e. they are direct participants of each other). Inter-depository settlements are conducted through the netting of securities obligations in each other's settlement accounts.
4.	Does (do) the securities system(s) allow other domestic or foreign systems to establish direct links on an equal basis to local members?	The members of the securities systems can establish direct links with any other local or foreign securities systems if it does not contradict with the local legislation and/or governing rules and procedures of both the systems and the members.
5.	Does (do) the securities system(s) allow foreign market participants to become direct participants?	In accordance with the local legislation foreign market participants are not permitted to become direct members of the stock exchanges, including their clearing and settlement divisions, or open nominee (client) accounts at the depositories. Only the local legal entities licensed as depositories by the Federal Commission for Securities Market (FCSM) can act as the nominee holders of the securities. Therefore, all non-residents, including custodial banks, are recognized as beneficial owners even if they hold the securities for their clients. Foreign market participants are allowed to open proprietary accounts at the settlement depositories, though practically they prefer to use the services of local custodians.