Settlement process - Russia
Settlement cycles
There is no fixed settlement cycle in the Russian market for MICEX-RTS trades, settlement cycles may vary from T+0/3 to T=S.
For OTC trades, the settlement date acts more as a guideline than a contractual agreement. Equity settlement varies and could take place any time between 5 and 30 days after the initial order has been placed with the broker. The actual delivery time is affected significantly by the location of the registrar where the transfer of ownership will take place. Settlement is not considered final until shares have been registered into the new nominee name.
For OFZ bonds, the settlement cycle is T+0/1 provided that Clearstream’s and the counterparty custodian’s instructions match.
Settlement flows
OTC settlement of equities via registrar
Average cycle at Moscow registrars = T+5 / at non-Moscow registrars = T+7.
Standard securities transfer - equities - free of payment(registrar, for equities that the CSD does not accept under custody)
T+0 | Client trades with counterparty. |
T+0/1 | Client sends MT54x to custodian. |
T+2 | Custodians pre-match instructions via telephone. Seller’s custodian submits a transfer order to registrar. |
T+2/6 | Seller’s custodian receives notification from registrar on completion of re-registration. |
T+3/7 | Seller’s custodian executes the instruction and sends settlement confirmation to the seller. Seller’s custodian sends copy of registrar notification to buyer's custodian. Buyer’s custodian executes the instruction and sends confirmation of settlement to buyer. |
Standard securities transfer - equities and non-exchange traded corporate, municipal and OFZ bonds - free of payment(NSD)
T+0 | Client trades with local broker. |
T+0/1 | Client sends MT54x to custodian. |
T+2 | Custodian and broker pre-match instructions via telephone. Custodian sends settlement instructions to NSD. |
T+3 | Custodian receives settlement confirmation from NSD. Custodian sends settlement confirmation to client. |
Standard securities transfer - equities and non-exchange traded corporate, municipal and OFZ bonds - against payment in USD
SD-1 | Client funds cash account in USD at their custodian. |
SD | Client sends MT54x to custodian. Custodian sends settlement instructions to NSD. NSD matches the instructions in their system, checks funds and securities availability on the accounts and sends settlement confirmation to custodian. Custodian sends security settlement confirmation to client and settlement bank sends cash report to client. |
Settlement of exchange traded government and corporate bonds through NSD (currently not offered by Clearstream)
Standard settlement cycle = T+0.
Standard securities transfer
T-1 | Client sends local broker (DB) order to trade on-exchange. Broker checks securities and cash position on-exchange (cash) / NSD (securities). |
T+0 | Broker transfers cash (RUB) or securities to the clearing house before 10:00 local time. Broker executes order on-exchange. MICEX confirms execution to broker, clearing house and NSD (gross basis). Broker confirms deal execution to client. NSD confirms settlement to custodian (net basis) at end of day. Custodian confirms closing balances to client reflecting a net securities balance change per line of security and closing balances. |
Registration
Physical securities
Most securities in Russia exist in non-documentary form, 100% of equities are dematerialised according to the legislation and fixed income instruments are issued either in a book entry form or in physical form dematerialised through global certificates that are placed for centralised safekeeping with the CSD.
The only physical securities existing on the market are promissory notes, however according to regulations on custody activity in Russia these securities have not been able to be held under custody since 2013.
Custodians do not keep any securities in physical form under custody.
Stamp duty
Stamp duty is not applicable to the Russian market.
Penalties
Buy-ins
Not applicable to the Russian market.