NSD and BNY Mellon collaborate on depository receipts
17 December 2013 London
Image: Shutterstock
Russian-based investors and brokers will be able to issue and cancel depository receipts in Russian companies thanks to an agreement between the National Settlement Depository (NSD), Russia鈥檚 central securities depository, and BNY Mellon.
The two companies have developed a structure by which depository receipts, issued by BNY Mellon on shares of Russian companies, can be converted into a share or vice versa in Russia within one business day.
This process currently takes between two and three business days. The structure will allow depository receipts to trade on the secondary market, settle and be used as collateral in repos by Russian market participants in their own time zone.
Eddie Astanin, chairman of the executive board of NSD, said: 鈥淲e believe it will provide an added value service for our customers. As a consequence we expect to see increased interest from global investors working with depository receipts in the Russian securities market.鈥�
BNY Mellon will act as custodian for NSD and depository bank for depository receipts trading in the Russian market.
Christopher Kearns, CEO of BNY Mellon's depository receipts business, said: 鈥淭his is a revolutionary solution for the capital markets because it鈥檚 the first time a DR will trade on its local market. DR鈥檚 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.鈥�
The two companies have developed a structure by which depository receipts, issued by BNY Mellon on shares of Russian companies, can be converted into a share or vice versa in Russia within one business day.
This process currently takes between two and three business days. The structure will allow depository receipts to trade on the secondary market, settle and be used as collateral in repos by Russian market participants in their own time zone.
Eddie Astanin, chairman of the executive board of NSD, said: 鈥淲e believe it will provide an added value service for our customers. As a consequence we expect to see increased interest from global investors working with depository receipts in the Russian securities market.鈥�
BNY Mellon will act as custodian for NSD and depository bank for depository receipts trading in the Russian market.
Christopher Kearns, CEO of BNY Mellon's depository receipts business, said: 鈥淭his is a revolutionary solution for the capital markets because it鈥檚 the first time a DR will trade on its local market. DR鈥檚 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.鈥�
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
