Today leading Russian banks – operators of the currency market, the Bank of Russia, the MICEX and the National Clearing Center (NCC) have signed an agreement regulating the order and terms of purchase and sale of foreign currency on the MICEX with the use of centralized clearing (Trade Agreement). Thus, the MICEX Group is completing the transfer of clearing functions from the MICEX to the NCC, which is going to act as the central counterparty in transactions on the currency market.

The Trade Agreement was signed by Gazprombank, VTB Bank, Alfa-Bank, Vnesheconombank, Citybank, Raiffeisenbank Austria and MDM-Bank. Sberbank, Bank of Moscow, Deutsche Bank and MMB are expected to sign the Agreement in the nearest future.

According to the MICEX President Alexander Potemkin, the signing of the Trade Agreement is an important step towards the creation of the first central counterparty on the Russian financial market. The project, which will help to modernize the system of clearing on the exchange-based currency market, is expected to be launched this autumn.

The transfer of clearing on the MICEX Group’s exchange-based currency market to the National Clearing Center requires the implementation of a new pattern of relationships among participants in trading, which involves the participation of a central counterparty. This step will help to improve the reliability of the risk management system, make relationships among participants transparent and, in the long-term, enable participants to use their financial assets more effectively.

The Board of the MICEX and the Supervisory Council of the National Clearing Center have adopted a new normative base for the exchange-based currency market, which provides for the use of centralized clearing. This normative base includes the Rules of Purchase and Sale of Foreign Currency in the Unified Trading Session of Interbank Currency Exchanges (the UTS Rules) and the NCC’s Rules of Clearing in the Unified Trading Session of Interbank Currency Exchanges (the Rules of Clearing). The new standards of transactions in foreign currency have been approved by the Bank of Russia. They are reflected in the Trade Agreement signed today.

The Trade Agreement establishes the order and terms of electronic transactions in foreign currency in the UTS, using the MICEX trading system. In particular, under the Agreement, the MICEX guarantees the performance of the NCC’s obligations for transactions concluded in the course of trading, provided the NCC fails to perform appropriate obligations. In this case the size of the MICEX’s liability to participants in trading in the UTS is 2.6 billion rubles.

The Trade Agreement was signed by the MICEX, the NCC, the Bank of Russia and a number of banks – leading operators of the currency market. Later, the MICEX intends to sign supplements to the Trade Agreement with other participants in trading.

Soon, all participants in trading on the exchange-based currency market will receive from the MICEX letters containing detailed information on the order of participating in trading on the MICEX currency market and a package of agreements which are needed to be concluded, including a copy of the Trade Agreement.