Simple Clearing Mechanism

A new mechanism for discharging obligations on securities transactions under the terms of simple clearing

The MICEX Group has introduced a new service for stock market participants, enabling them to conclude transactions and discharge obligations on previously concluded transactions under the terms of simple clearing, effecting settlements on such transactions on a “delivery vs. payment” basis during the trading day in close to real-time. This means that Traders will be able to quickly effect settlements on these transactions during the trading day rather than after its end.

Implementation of this project is aimed at providing MICEX Group clients with better opportunities for managing their liquidity during the course of trading in on-exchange markets and more options regarding clearing and trading methods, as well as accelerating settlements of concluded transactions, including those in the process of initial offerings and repo transactions.

Concluding transactions on simple clearing terms is available in targeted trading modes, including the REPO Mode and Negotiated Transaction Mode (for which a new settlement code Z0 has been introduced). In addition, Traders have the opportunity to initiate discharge of their obligations on previously concluded transactions (including the second part of REPO transactions) by filing urgent execution reports, which make it possible to effect settlements on such transactions without delay.

Transactions with the settlement code Z0 are concluded and filing of urgent execution reports is effected from 10:00 to 17:00 Moscow time.

This new service provided by MICEX is aimed, first and foremost, at major transactions; that is why application of the simple clearing mechanism on the stock market is confined at the first stage to transactions of more than 10 million rubles.

When providing transaction registration services on simple clearing terms, the MICEX Group aims to ensure that the time between the conclusion of the transaction at the Stock Exchange (or filing of the urgent execution report by both counterparties to the transaction) and the execution of corresponding transactions in the settlement depositary (NDC) and settlement institution (ZAO MICEX Settlement House) does not exceed 5 minutes.