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Russia’s DR market set to grow
17 December 2013
Joint partnership between BNY Mellon and Russia's CSD is "revolutionary" for capital markets
BNY Mellon has joined forces with the Russian central securities depository, National Settlement Depository (NSD), to help investors based in Russia trade depositary receipts (DRs) in Russian companies.
The two companies have developed a structure where DRs issued by BNY Mellon on shares of Russian companies can be converted into a share in Russia - or vice versa - within one business day.
This is a big step forward for the market given that the process currently takes between two and three business days.
CEO of BNY Mellon’s DR business Christopher Kearns called the move “revolutionary” for the capital markets as this is the first time a DR will trade on its local market.
“DR’s trading in multiple markets at the same time is also a relatively new concept. This is another step towards the idea of a global security which allows investors to transcend geographical borders,” he added.
The solution will allow DRs to trade on the secondary market, settle and be used as collateral in repo agreements by Russian market participants in their own time zone.
The NSD expects to see more interest from global investors working with depositary receipts in Russia’s securities market, said Eddie Astanin, chairman of the executive board of NSD.
BNY Mellon will act as custodian for NSD and depositary bank for DRs trading in the Russian market.