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Russia’s NSD is seeking to restore trust through improved data collection

Russia’s NSD central securities depository has launched a joint project with Interfax information agency to coordinate their efforts for the development of a system of assessing the fair value of financial instruments. The move is part of an ongoing government reform agenda designed to turn Moscow into an international financial centre.

The NSD was created in November 2012, in a move which at the time was hailed as the most important capital markets development in Russia for 20 years. Together with Interfax, the NSD will now create a reference database containing all available data about Russian issuers and their financial instruments. This involves bringing together the record keeping system of Russia’s central securities depository, information disclosed by issuers via Interfax and up-to-date information about issuers and securities collected by Interfax.

The two companies plan to launch the first information product created as part of the project within a month. The system is being built with a multiple levels of data verification, and the idea is to ensure that information is updated automatically. According to NSD, the partners will also develop an objective system of assessing the fair value of financial instruments that will meet the requirements of Russian law and financial market participants.

“The project developed jointly with Interfax in the sphere of corporate information will allow replacing inconsistent and even contradictory data with a unified, reliable and standardised information source,” said Eddie Astanin, chairman of the executive board, NSD. “With respect to the price center development, we see that creation of a national benchmark in the sphere of fair value of securities is a very important and widely demanded task for the market. Both projects contribute to a systemic minimisation of risks associated with use of incorrect, untimely or incomplete information about Russian issuers and their securities.”

“The NSD’s and Interfax’s project aims at reducing market participants’ costs for receipt of accurate and user-friendly information,” added Vladimir Gerasimov, first deputy general director, Interfax. “They will receive data in the unified format and will be able to customise them in accordance to their specific needs.”

The Putin-led government in Russia has been working on a project to turn Moscow into an international financial centre since 2011. The introduction of settlement services for Russian equities by Euroclear last year has been hailed as a significant step forward for investors in the country. Euroclear introduced settlement for Russian OFZs and other bonds as part of a broader extension of services in the country.

However, Russia has been battling capital flight over the last 12 months, as investors have pulled out capital amid western sanctions against the country and Russian retaliation. Sanctions began in March 2014 when the US, EU and Canada introduced sanctions in reaction to the Russian annexation of Crimea. By October, Bloomberg reported that $85 billion of capital outflows had left Russia since the start of the year.