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Reliability of the MICEX Derivatives Market

The system of guarantees in the MICEX Derivatives Market is comprised of a set of measures ensuring the maximum extent of protection over the market and its participants when performing operations in the MICEX Derivatives Market:

Legal measures

  • Availability of the licenses required to organize trading, clearing, and settlements for all of the MICEX Group organizations; availability of the exchange intermediary licenses and exchange broker licenses for all of the Traders and their specialists;
  • Approval of the MICEX Derivative Market’s internal regulatory framework by government regulatory authorities (the Bank of Russia, the FSFM of Russia) and control over compliance with the internal regulations;
  • The rules, procedures, and powers for making decisions in extraordinary situations are described in detail and clearly regimented in the MICEX Derivative Market’s internal regulatory framework.

Technological measures

  • The MICEX Derivative Market’s Trading System functions on the basis of its software and hardware complex, which integrates MICEX, the MICEX Clearing House, the National Depository Center, and the network of regional exchanges in all of Russia’s federal districts into a united informational, trading, and settlement space, thus making it possible to perform operations in real time. The boundless opportunities provided by the trading system include a high level of security, reliability, and operation without failures or technical problems.
  • Financial measures
  • The funds contributed by the MICEX Derivatives Market participants as a security are kept and settlements are performed by the MICEX Settlement House, which renders services to all of the MICEX markets. The reliability of the MICEX Settlement House is ensured by:
    – prohibition from performing active operations with client’s funds and granting credits and bank guarantees, which follows from the Settlement House’s status as a settlement non-bank credit organization;
    – separation of funds directed by the participants to various MICEX markets, which rules out the possibility of the markets influencing each other.
  • The Reserve Fund for Risk Coverage has been established out of MICEX’s own funds in the amount of 2 billion rubles to settle insolvency situations in the MICEX Derivatives Market.

Organizational measures

  • The additional stability of the market is ensured by a two-tier system of participation in the MICEX Derivatives Market. Three categories of participation in clearing are established, each with different rights and duties as regards trading, settlements, and rendering services in the MICEX Derivatives Market. Thus, more stringent requirements are imposed on clearing participants who have obligations with respect to the trades made by their clients to whom they render trading and clearing services, including requirements on clearing participants’ financial status.
    The reliability and stability of the MICEX Derivatives Market’s structure have been confirmed by the opinions of the Millbank, Tweed, Hadley & McCloy international law firm, the Russian Academy of Science’s Institute of State and Law, and KPMG, a consulting firm.