Moscow Exchange Undergoes New Dividend Policy with Hike to 55%

The Moscow Exchange’s (MOEX) Supervisory Board has approved a new dividend policy, which constitutes a hike of its payout floor to 55% of the group’s net profit under IFRS, according to a MOEX statement.

In parallel with the dividend change, MOEX’s executive board has undergone a review of its overall strategy implementation, and is slated to unveil the exchange’s operating metrics and financial results for the first eight months of 2015. Furthermore, the board’s directors have approved a proposal that will see the exit of the MOEX’s subsidiaries in Ukraine, which could ultimately culminate in the participation in the capital of a new sovereign Russian credit rating agency.

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According to Alexander Afanasiev, Chief Executive Officer of Moscow Exchange, in a recent statement about the new dividend policy, “Moscow Exchange’s updated dividend policy underscores the record payout ratio that the Company achieved in 2014, when we returned 55% of net profit to shareholders, against a target of 50%. This now forms the floor for future dividends.”

Moreover, “Other fundamentals of the policy remain unchanged: the percentage of net profit available for dividends will be determined by the capital needs of the Exchange’s subsidiaries, primarily the NCC Clearing Bank, which acts as the Central Counterparty, as well as funding requirements for capital investments into IT infrastructure and potential acquisitions. This means we will continue to balance dividend payouts with business development needs and our goal of minimising financial and operational risks for market participants,” he added.

MOEX made headlines earlier this week after its trading went dark for the second time in September, this time after a routine morning software error occurred. Following the opening on Monday, September 21, traders and market participants had reported difficulties withdrawing orders placed in prior periods as well inaccurate order book data for select derivative instruments.