BCS Launches Prime Platform for Russian Capital Markets
- Potential further sanctions against Russia could be just around the corner, further lowering capital market demand.
BCS Global Markets, the largest independent securities broker on the Moscow Exchange (MOEX), announced this Monday that it has launched a new trading product which will give professional and institutional investors easier access to Russia’s capital markets.
Russia is a complicated market on a regulatory, settlement and hedging perspective for institutions located outside of the country. The new synthetic prime platform aims to reduce the complications by, for the first time, allowing firms without dedicated Russian access a way into the country’s capital markets.
The platform is particularly targeted towards institutional and professional investors in countries such as the United States, as US-based institutions are unable to trade MOEX-listed derivatives. This is because the market is not recognized by the Commodity Futures Trading Commission (CFTC).
Specifically, the synthetic prime brokerage offering can be denominated in the US dollar. This means institutions don’t need local settlement arrangements or Russian ruble accounts to access the instruments. In the future, the broker aims for the synthetic prime product to become a multi-asset platform.
BCS is a market leader for Russian equities and foreign exchange (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term). Earlier this year, the company was the first Russian brokerage to become a registered member of the New York Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term (NYSE).
Tim Bevan
Source: LinkedIn
Commenting on the product launch, Tim Bevan, Global Head of Prime BCS Global Markets and Co-CEO BCS UK said: “We believe that the Synthetic Prime offering can become a major international business. We’re already seeing a lot of demand from small and medium sized hedge funds who are underserved by larger international prime brokerages - we’re confident that this is a highly scalable model.”
Russia Could Face Further Sanctions
While BCS states that it already sees a lot of demand for its product, in general, outside demand for access to Russia’s capital market is low. This is in large part due to the difficulty for firms located in countries outside of Russia to gain access. However, Russia could be looking to face further sanctions, which will only further weaker demand.
These sanctions refer to the news that came out overnight from Ukraine that three of its boats were attacked, fired on and seized by the Russian military as they attempted to access Ukrainian-controlled ports in the Azov Sea.
Russia, however, disputes this description of events, insisting that the Ukrainian vessels had taken a route to provoke the Russian army and have encroached on its maritime territory. This incident follows months of tension brewing between the two nations.
Now, Ukraine’s parliament is calling for the European Union (EU) to impose further sanctions on Russia, with Ukraine's envoy to the European Union, Mykola Tochytskyi calling for action on Twitter.
We urge EU&member states resolutely react to Russia’s blatant use of military force in #AzovSea What else shall Russia do to provoke harsh&decisive response from intern community? We need new sanctions agnst #Russia. We must stop Kremlin's war agnst Ukraine. #RussiaAttacksUkraine pic.twitter.com/Z25pxdktH8
— Mykola Tochytskyi (@tochytskyi) 25 November 2018
If further sanctions are to be imposed on Russia by the EU, this could hamper the success and demand for BCS Global Markets’ product. However, only time will tell.
BCS Global Markets, the largest independent securities broker on the Moscow Exchange (MOEX), announced this Monday that it has launched a new trading product which will give professional and institutional investors easier access to Russia’s capital markets.
Russia is a complicated market on a regulatory, settlement and hedging perspective for institutions located outside of the country. The new synthetic prime platform aims to reduce the complications by, for the first time, allowing firms without dedicated Russian access a way into the country’s capital markets.
The platform is particularly targeted towards institutional and professional investors in countries such as the United States, as US-based institutions are unable to trade MOEX-listed derivatives. This is because the market is not recognized by the Commodity Futures Trading Commission (CFTC).
Specifically, the synthetic prime brokerage offering can be denominated in the US dollar. This means institutions don’t need local settlement arrangements or Russian ruble accounts to access the instruments. In the future, the broker aims for the synthetic prime product to become a multi-asset platform.
BCS is a market leader for Russian equities and foreign exchange (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term). Earlier this year, the company was the first Russian brokerage to become a registered member of the New York Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term (NYSE).
Tim Bevan
Source: LinkedIn
Commenting on the product launch, Tim Bevan, Global Head of Prime BCS Global Markets and Co-CEO BCS UK said: “We believe that the Synthetic Prime offering can become a major international business. We’re already seeing a lot of demand from small and medium sized hedge funds who are underserved by larger international prime brokerages - we’re confident that this is a highly scalable model.”
Russia Could Face Further Sanctions
While BCS states that it already sees a lot of demand for its product, in general, outside demand for access to Russia’s capital market is low. This is in large part due to the difficulty for firms located in countries outside of Russia to gain access. However, Russia could be looking to face further sanctions, which will only further weaker demand.
These sanctions refer to the news that came out overnight from Ukraine that three of its boats were attacked, fired on and seized by the Russian military as they attempted to access Ukrainian-controlled ports in the Azov Sea.
Russia, however, disputes this description of events, insisting that the Ukrainian vessels had taken a route to provoke the Russian army and have encroached on its maritime territory. This incident follows months of tension brewing between the two nations.
Now, Ukraine’s parliament is calling for the European Union (EU) to impose further sanctions on Russia, with Ukraine's envoy to the European Union, Mykola Tochytskyi calling for action on Twitter.
We urge EU&member states resolutely react to Russia’s blatant use of military force in #AzovSea What else shall Russia do to provoke harsh&decisive response from intern community? We need new sanctions agnst #Russia. We must stop Kremlin's war agnst Ukraine. #RussiaAttacksUkraine pic.twitter.com/Z25pxdktH8
— Mykola Tochytskyi (@tochytskyi) 25 November 2018
If further sanctions are to be imposed on Russia by the EU, this could hamper the success and demand for BCS Global Markets’ product. However, only time will tell.