Non-banking credit institution - Central Counterparty National Clearing Centre (abridged-CCP NCC), was assigned a new status on the 28th of November 2017 in accordance with the Federal Law of 29.12.2015 No. 403-FZ “On introduction of amendments to separate legislative acts of the Russian Federation” and the decision made by its sole shareholder - Moscow Exchange Group.
Since incorporation in May 26, 2006 up to the date of a new status assignment CCP NCC was functioning in a capacity as a banking institution -Bank “National Clearing Centre”(Joint -stock company). CCP NCC performs functions of a clearing organization and central counterparty (hereinafter – CCP) in the financial market. Starting December 2007 it renders clearing services in the Group’s FX market, and then developed its services to securities, derivatives, precious metals,commodities and standardized OTC derivatives segments of the market.
As a central counterparty CCP NCC assumes risks incurred under the transactions concluded by members during trading, acting as an intermediary between the parties: i.e. as a seller for each buyer and as a buyer for each seller, so that replacing their contractual relations between each other with relevant contracts with a central counterparty.
CCP NCC’s main and most important function is to maintain stability in the serviced financial market segments through implementation of the state-of-the-art risk management framework conforming to the international standards and provision to members of such clearing services which would enable an efficient use of the allocated funds.
The transfer of a clearing function to CCP NCC, founded for this particular mission, became an important step in the Group’s development, as well as in development of all Russian financial market infrastructure, for it enabled the separation of clearing institution risks from the exchange risks by relocating the latter to a highly capitalized clearing institution.
Holding of a banking license enables CCP NCC to significantly improve reliability and efficiency of Group’s clearing and settlement system, because, as a non-banking credit institution , CCP NCC, on the one hand, is a subject to a strict regulation and supervision from the Bank of Russia, and, on the other hand, it has an access to the Central Bank’s refinancing instruments. By using services rendered by CCP NCC as clearing organization and central counterparty, the Group's market members are provided with a number of extra benefits:
CCP NCC guarantees performance of obligations to each non-defaulting member under the transactions concluded with the latter, irrespectively of how other market members perform their obligations.
СCP NCC spares members from the need to assess risks and set limits to each other, since members only have to assess their risks assumed to CCP NCC as a central counterparty.
CCP NCC’s clearing service with a partial collateral posting, as well as the netting performed by CCP NCC, enable members to use their funds more efficiently and reduce their transaction costs.
The assignment of the qualifying central counterparty status to CCP NCC by Bank of Russia in 2013 enables the Russian clearing members – credit institutions to decrease capital requirements both for trades with CCP NCC and for the collateral posted on the accounts opened with CCP NCC. In 2014, the Bank of Russia also assigned CCP NCC the status of a systemically important central counterparty.
CCP NCC’s strategic objective is to provide members of various financial market segments with integrated clearing services implying the use of the unified collateral and management of the members’s single positions (limits) while providing clearing services in all Group's exchange-based markets and OTC markets.
Since 2009, CCP NCC has been a member of the European Association of Central Counterparty Clearing Houses (EACH), and since 2011 – a member of the Global Association of Central Counterparties – CCP12. Its membership in these associations demonstrates compliance of NCC’s performance with the international standards and recognition of the success achieved by Moscow Exchange Group in the exchange infrastructure Development.