MOEX Revamps Instrument Offering, Clearing Capabilities

MOEX clients will benefit from a variety of upgrades and product offerings across its equity, bond and repo markets, effective

The Moscow Exchange (MOEX) has launched a number of instruments and upgrades across a number of asset classes on its platform, according to a MOEX statement.

More specifically, MOEX clients will benefit from a variety of upgrades and product offerings across its equity, bond and repo markets, all of which are effective immediately.

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First, all anonymous trading conducted in OFZs on MOEX will now settle on the T+1 cycle, thereby replacing the existing T0 and T+2 settlement schedule. This aims to reduce costs incurred by participants with the dual objective of fueling trading volumes, given that the advent of T+1 does not necessitate full pre-funding. Starting today, T0 settlement will also be reserved for negotiated trades only.

Additionally, MOEX has rolled out a new system for block trading in OFZs, which will specifically allow firms to fill large orders at the average market price. This will be accomplished in the form of trading which will constitute discrete auctions held twice daily, from 11:47 am to 12:00 pm MSK, and from 4:47 pm to 5:00 pm MSK.

These auctions represent a bid to help allow the filling of large orders in the most time sensitive manner, given the concentration of liquidity in short periods of time when bids are collected and matched.

MOEX has also altered the discrete auction mechanism for its shares on the exchange – in this instance auctions are slated to be run once or twice a day and only for shares included in the MICEX Index. However, shares will continue to be available for block trading and repo with the CCP during the auctions.

Equities will also receive a slight tweak at MOEX with the launch of opening auctions from 9:50 am to 10:00 am MSK for OFZs, replacing its existing pre-trading period. These auctions will allow participants to utilize market orders, allowing for the opening price to achieve better congruency with true market price.

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Additional Instruments Added

MOEX will be expanding the list of securities admitted to trading without full pre-funding as a result of the division of securities into ‘eligible as collateral’ and ‘admitted to trading without full prefunding’. In order to be eligible as collateral, securities will need to meet a number of criteria stipulated by the Central Counterparty, including parameters such as credit rating and inclusion in the Bank of Russia’s Lombard List or the MICEX Index.

Moreover, agency cross trades will be initiated for clients of a singular market participant, as long as such trades are made via the Central Counterparty. Agency cross trades will gain access to the central order book and negotiated trading modes.

Finally, settlement across either the USD and EUR will become available for repo and negotiated trades with the CCP, in addition to RUB settlement. The maximum term for repo and negotiated trades with the CCP will grow to encompass seven days – the rational behind this is to facilitate liquidity management over longer periods and allow synchronization of CCP-cleared repo transactions with certain Bank of Russia repo transactions, as well as enabling participants to reduce interest rate risk.

Foreign securities are also eligible for settlement in USD, in addition to RUB, however MOEX will announce the admission date for such securities in due course. In the interim however, MOEX has already started to offer trading in bonds denominated in CNY and GBP with settlement in those currencies. USD, EUR and OFZs may be accepted as contributions to the Guarantee Fund.

In terms of clearing settlement batches, the intraday clearing session on the Equity & Bond Market will begin one hour later, at 5:00 pm MSK, starting today. The period for mandatory rollover of obligations carried out by the NCC as the CCP in the event of a default will also be cut to two consecutive settlement days for funds, and four settlement days for securities.

Last week, MOEX made headlines after it was admitted to the Foreign Exchange Professionals Association (FXPA) as a full member of the FX trade association.

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