Bank of Russia Takes Steps to Increase FX Volumes on Moscow Exchange

Firms with at least ₽1 billion in capital will no longer have to trade FX through commercial banks or brokers.

The Bank of Russia is taking steps to increase FX volumes and liquidity at the country’s largest trading venue, Moscow Exchange, in 2017. The central bank has announced that from the 16th of January firms with at least ₽1 billion (or about $16.3 million) in capital will no longer have to trade FX through the commercial banks and brokers.

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This move will help drive more currency trading to the leading Russian exchange, increasing competitiveness and removing friction, but it might hurt the private sector institutions that handled all this volume until now. Still there are further requirements for the all Russia-registered companies that now wish to trade directly on the Moscow Exchange. Beyond the ₽1 billion capital, they also need to have specialized financial transactions department and a record of annual trading volumes no less than $100 million in the past two years.

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Yesterday it was reported that MOEX’s National Settlement Depository (NSD), a central securities depository, has received a license for repository operations issued by the Bank of Russia. In addition, the Bank of Russia approved the Regulations on the Repository Services Customer Committee of NSD’s Executive Board.

Earlier this month MOEX released its trading volumes for November 2016 which showed improvements in key segments when weighed against its 2015 equivalents, but again failed to negate the downward trend seen across last few months, with FX trading volumes slightly down.

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