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The role of ISO Standards in Russia

The role of ISO Standards in Russia. 31 st October 2007 John Falk, Securities Market Infrastructures SWIFT. Standards. Do you care?. Investments into Developing Markets. No standards or many standards. Cost Errors Risk Poor service Unhappy customers. Why ISO Standards.

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The role of ISO Standards in Russia

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  1. The role of ISO Standards in Russia 31stOctober 2007 John Falk, Securities Market Infrastructures SWIFT

  2. Standards Do you care? RU_Conference_20071031

  3. Investments into Developing Markets

  4. No standards or many standards • Cost • Errors • Risk • Poor service • Unhappy customers

  5. Why ISO Standards • Business clarity • Significantly reduces errors (STP) • Reduction of risk • Volume insensitive • Domestic and Cross border access • Reduction in costs overall

  6. But……. • Business cases are difficult to build • Direct cost • Pressure to continue to use domestic standards • Local market practice easier to handle with domestic standards

  7. A world without ISO and SWIFTDifferent Standards, Messaging & Connectivity User Market Infrastructures eg CSD’s

  8. Single Window with ISO and SWIFTReusing Standards, Messaging and Connectivity User Market Infrastructures eg CSD’s

  9. Harmonisation in EuropeThe possible GDP Effect Source: European Commission (2006).

  10. Benefits for all market players • Sharing information on how standards supports their needs • Centralised working group to address initiatives impacting institutions and their use of standards • Harmonisation of requirements for standards • Harmonisation of market practices

  11. Russian Stock Market Infrastructure Market Fragmentation • No CSD • Fragmented and product related settlement • Absence of mandatory DVP settlement in RUB (except for MICEX trades) • Foreign nominees are not recognised • No central source of information on corporate actions • 6 Stock Exchanges • 5 Settlement Depositories • 80 Registrars • 10 Clearing Organisations • 300,000+ Investors • 1,440 Broker/Dealers • 483 Custodians Source: National Depository Center

  12. Россия РП РТС РТС Брокеры/ Дилеры ДКК Банк России Инвесторы резиденты Другие биржи Расчетные банки Реестры НДЦ Инвесторы нерезиденты Банки- кастодианы РП ММВБ ММВБ Международные клиринговые системы Расчетные депозитарии Эмитенты

  13. Россия РП РТС РТС Брокеры/ Дилеры ДКК Банк России Инвесторы резиденты Другие биржи Расчетные банки Реестры НДЦ Инвесторы нерезиденты Банки- кастодианы РП ММВБ ММВБ Международные клиринговые системы Расчетные депозитарии Эмитенты

  14. Standards in the Russian payments market • Domestic payments traffic via SWIFT exceeds cross-border • RUR6 is generally accepted in the market for Ruble payments • BIC identifier project with the Central Bank • Elements from RUR6 are used in RTGS project with the Central Bank

  15. Standards in the Russian securities market (1) • MoU between SWIFT and FFMS signed in 2006 • SWIFT is part of the FFMS coordinative council for Russian securities market infrastructure • MoU’s has been signed with NAUFOR and PARTAD • The current version of PARTAD standards has been examined by SWIFT for ISO 20022 compatibility

  16. Standards in the Russian securities market (2) Investment Funds • ISO 20022 should be used for investment funds messages in the Russian market • The first set of investment funds messages, with Russian market practice, are awaiting approval by the Funds working group • Investment Funds WG is collaborating closely with SWIFT Standards

  17. Results of the RussianSMPG(SWIFT-RUS 4) • SWIFT–RUS 4 document approved, covering settlement messages in the Russian securities market (instructions, statements, confirmations) • SWIFT-RUS4 updates include: - message matrices - message flow examples • Collaboration with SWIFT Standards & Global SMPG on party identification for securities settlement “through” Registrars

  18. Status of various initiatives using ISO standards

  19. Россия РП РТС РТС Брокеры/ Дилеры ДКК Банк России Инвесторы резиденты Другие биржи Расчетные банки Реестры НДЦ Инвесторы нерезиденты Банки- кастодианы РП ММВБ ММВБ Международные клиринговые системы Расчетные депозитарии Эмитенты

  20. Россия РП РТС РТС Брокеры/ Дилеры ДКК Банк России Инвесторы резиденты Другие биржи Расчетные банки Реестры НДЦ Инвесторы нерезиденты Банки- кастодианы РП ММВБ ММВБ Международные клиринговые системы Расчетные депозитарии Эмитенты

  21. Next steps in Russia with Securities standards • Continued proactive participation in the standardisation initiatives of the Russian securities market • Further cooperation with FFMS • Participation in the CSD infrastructure project • Russian securities market participants to work within global SMPG

  22. 15-19 September 2008 Vienna, Austria

  23. Thank you for your attention

  24. The role of ISO Standards in Russia 31stOctober 2007 John Falk, Securities Market Infrastructures SWIFT

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