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Euroclear Bank to start service for Russian OFZ

Euroclear Bank, the international central securities depository (ICSD), will start its post-trade services for Russian OFZs from 7 February, following regulatory clearance from Russian government.

The company said that the service will commence with OTC-traded OFZ transactions, followed by stock exchange-traded transactions in March 2013.

All the major international firms trading OFZs will be able to settle those trades and deposit their positions through Euroclear Bank’s account with Russia’s central securities depository, National Settlement Depository (NSD).

The Euroclear Bank/NSD link will enable clients of each depository to easily settle cross-border transactions.

It is expected that new foreign capital inflows to Russia through this new channel will be approximately $20bn.

OFZs kept in custody by Euroclear Bank will also be eligible as securities collateral for securitized transactions where the settlement provider is the triparty collateral management agent.

Euroclear Bank caters settlement and related securities services for cross-border transactions linking domestic and international bonds, equities, derivatives and investment funds.