Banks in Russia to receive a new instrument from Moscow Exchange

In the year 2016 Moscow Stock Exchange will introduce a brand new financial instrument – the clearing participation certificate repo (CPC). The aim of this instrument is to enable trading backed by collateral deposited at the National Clearing Centre.

This instrument will increase the amount of bids on REPO auctions, because it gives more latitude to owners of collateral deposited in the Central Bank. The main feature of repo with clearing participation certificate is the possibility to sell securities (like bonds, stocks) to National Clearing Centre and get the CPC instead. First of all, the CPC becomes a collateral on which bank will receive liquid assets, secondly having the CPC means that it is still the owner of securities. Due to that fact, during the period of REPO transaction, it can still receive benefits from collateral: interests from bonds or dividends from stocks. It also keeps all the stockholder’s rights like the right to participate in general meetings of the company, right to vote on the company’s issues etc.

Source: Ассоциация российских банков (АРБ),

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