NDC's and MICEX SH's AGMs Make Decision on Reorganization and Sum Up Results for 2009

Top Quote The shareholders of Russia's National Depository Center and MICEX Settlement House made decision on reorganization. End Quote
  • (1888PressRelease) July 02, 2010 - MOSCOW – On 29 June, 2010 the annual general meeting of shareholders (AGM) of MICEX Settlement House (MICEX SH) has been held. The AGM made decision on reorganization of MICEX SH in the form of accession of “The National Depository Center” (Closed Joint Stock Company) (NDC). The shareholders of MICEX SH elected Sergey Sukhinin the Chairman of the Board Executive of the company.

    The AGM approved the name of the new organization: National Settlement Depository (NSD).

    The AGM of the shareholders of NDC has been also conducted on 29 June. The company's shareholders decided to reorganize NDC by means of its accession to MICEX SH, to approve the accession agreement, to authorize Eddie Astanin, Director General, NDC, to sign the agreement, to approve the transfer act, and to establish MICEX SH as an authorized organization for placement of the information related to beginning of the reorganization procedure in the publication issuing data on state registration of legal entities.

    Ruben Aganbegyan, President, MICEX, commenting on importance of the AGMs' decisions, said: "An integration of MICEX SH and NDC provides centralization of the settlement and depository functions within the framework of a sole legal entity; this complies with widespread world practice. We consider the integration of MICEX SH and NDC as an important step towards an emergence of a unified settlement depository in Russia. Meanwhile a possibility of provision of the services corresponding with best international standards is a necessary condition for building of the International Financial Center in Russia."

    In the course of a press briefing held 29 June after MICEX SH's and NDC's AGMs Vladimir Gusakov, Vice President, Member of the Managing Board, MICEX, pointed out: "Today the companies' shareholders made decisions on integration of NDC and MICEX SH, i.e. on formation of a settlement depository with a license of non-bank credit organization corresponding with the highest international requirements. A process of integration is to represent the most important stage of MICEX Group's switch to a single share. MICEX will be the new company's shareholder; each of other shareholders will own one share and will be managing the settlement depository through a shareholders' agreement mechanism."

    Eddie Astanin, Director General, NDC, added: "The decision made by the shareholders in fact means a beginning of formation of a settlement depository of the new generation on basis of NDC and MICEX SH which will have a newest corporate governance system and will develop plans on improvement of existing services and implementation of new combined post-trading services and products. In particular the new company is to develop services related to multicurrency settlements on “delivery versus payment” (DVP) transactions with Russian and foreign issuers' securities, corporate actions services with such securities, agency services related to collateral management, and services connected with settlements on forex “payment versus payment” (PVP) transactions.

    In the near future a preparation of a plan of the two companies' operating integration will be completed. The plan is based on provision of reliability and continuity of all business processes as of the moment of integration followed by further optimization."

    Sergey Sukhinin, Chairman of the Executive Board, MICEX SH, pointed out:
    "The integrated company will retain a status of a non-bank organization with nil credit risks which is to be regulated by the Bank of Russia. This is very important for us and our clients as the issues of reliability, liquidity and operational efficiency are crucial for meeting of the clients' requirements."

    MICEX SH's and NDC's AGMs have elected MICEX SH's Supervisory Board and NDC's Board of Directors. Each board includes the following members:

    Ruben Aganbegyan, President, MICEX;
    Eddie Astanin, Director General, NDC;
    Mikhail Bratanov, Director of Depository, ROSBANK (OJSC JSCB);
    Yuri Dubin, Director of Depository, Sberbank;
    Alexander Ikonnikov, Director General and Managing Partner of Board Solutions CJSC, Chairman of Supervisory Council, Co-Founder, Independent Directors Association;
    Sergei Lykov, Member of the Management Board, Deputy Chairman, Vnesheconombank;
    Natalia Sidorova, Head of Depository Services Department, ING BANK (EURASIA) ZAO;
    Sergey Sukhinin, Chairman of the Executive Board, MICEX SH;
    Vladimir Tatsiy, First Vice President, Head of Depository Center, GPB (OJSC);
    Tatiana Fomina, Head of Financial Market Operations Directorate in the Banking Operations Department, ZAO UniCreditBank;
    Tatiana Chepeleva, Project and Development Director, OTKRITIE Brokerage House JSC;
    Alexander Scheglov, Director General, Open Joint Stock Company Investment Company “ZERICH Capital Management”;
    Nadezhda Ushakova, Senior Vice President, Head of Depository, JSC VTB Bank.

    Sergey Lykov, Member of the Management Board, Deputy Chairman, Vnesheconombank, has been elected the Chairman of MICEX SH's Supervisory Board and NDC's Board of Directors.

    MICEX SH's Audit Committee now includes the following members:

    Olga Gordienko, Chief Accountant, MICEX;
    Irina Glazkova, Head of Internal Audit Service, MICEX;
    Irina Ryazhskikh, Director, Financial Department, MICEX.

    NDC's Audit Committee now includes the following members:

    Olga Gordienko, Chief Accountant, MICEX;
    Vladislav Zimin, Economic Advisor, Market Services Department, Bank of Russia;
    Yana Postovskaya, Deputy Director of Internal Audit Department, ZAO UniCreditBank;
    Vyacheslav Ulupov, Director, Internal Audit Service, Vnesheconombank;
    Yuri Yukin, Head of Internal Audit Service, Evrofinance Mosnarbank.

    NDC's Operating Results for 2009

    The company's shareholders approved NDC's annual report and financial statements for the period from 10 August to 31 December, 2009. The AGM also considered the audit report and report by NDC's Audit Committee for NDC's financial and economic activities for the period from 10 August to 31 December, 2009. The shareholders decided to allocate NDC's net profit for 2009 in the amount of RUB199.001 million as follows:

    - to spend 5% of the net profit for formation of the provision in accordance with the section 7 of NDC's Charter
    - to retain the remaining part of the net profit as non-distributed NDC's profit
    - not to pay dividends on NDC's common registered shares

    The shareholders selected ZAO “Deloitte & Touche CIS” for the audit of the company’s accounting statements according to Russian Accounting Standards (RAS) and according to International Financial Reporting Standards (IFRS) until 2011 when NDC's AGM is planned to be held.

    NDC's revenues for 2009 according to IFRS and RAS amounted to RUB1.275 billion or 5.8% more against 2008 (RUB1.205 billion). The company's net profit according to IFRS reached RUB493.702 million. This is 22.8% more than for 2008 (RUB401.891 million). NDC's equity capital according to IFRS for 2009 increased by 32.25% reaching RUB2.267 billion (RUB1.711 billion as of the beginning of 2009).

    In 2009 NDC retained its position of Russia's biggest settlement depository with 73% share of assets on deposit (on basis of the assets' value). The value of securities on deposit with NDC as of 31 December, 2009, was RUB6.086 trillion. This is 47.35% more than for 2008 (RUB4.13 trillion). NDC is also Russia's leading paying agent on corporate and regional bonds. As of 31 December, 2009 NDC's share in this market reached 34.74% based on a total number of the corporate and regional bonds in circulation and 37.01% based on a number of the issuers of the corporate and regional bonds in circulation.

    MICEX SH's Operating Results for 2009

    The shareholders of MICEX SH approved the company's annual report and decided to spend the company's profit for 2009 for further development of MICEX SH. In the reporting year MICEX SH continued expansion in all exchange markets of MICEX Group in accordance with requirements of the newest operating efficiency, continuity and reliability.

    Currently MICEX SH is a biggest specialized settlement company, one of 30 biggest credit organizations in Russia in terms of its assets. Over 880 major banks and financial companies from various Russian regions are the clients of MICEX SH.
    MICEX SH's profit before tax for 2009 was RUB2.275 billion. This is 42.5% more against 2008. The company's net profit for 2009 reached RUB1.792 billion.

    The aggregate number of payments held through the correspondent account of MICEX SH's headquarters and the correspondent sub-accounts of the company's branches with the Bank of Russia. In comparison with 2008 it increased by 160% amounting to RUB232.5 trillion.

    In 2009 the company fully implemented in its headquarters and branches the settlement services connected with use of the Banking Electronic Speedy Payments system (BESP system is the Bank of Russia RTGS system). MICEX SH's payment turnover in BESP system for 2009 was RUB93.5 trillion or 41% of total turnover of funds in correspondent account of MICEX SH opened with the Bank of Russia.

    MICEX SH continued development of its regional network by means of opening of the branches in Samara and Novosibirsk which now are operating in government securities market, forex and monetary market.

    MICEX SH jointly with NDC began conducting settlements on foreign currency DVP operations via Euroclear Bank SA/NV, Brussells, a foreign depository. In 2009 the companies held settlements on 231 transactions of its clients related to sale and purchase of securities denominated in US dollars and Euro for the total sum equivalent to US$649 million.

    MICEX SH implemented a project of conducting of cash settlements according to the results of Vnesheconombank's depository tenders.

    In line with MICEX SH's and NDC's businesses integration the regional branches of MICEX SH (Primorsky, Samara and Rostov branches) began acting as NDC's representatives providing of depository services to MICEX Group's regional customers.

    MICEX SH continued developing in international markets by means of opening of correspondent accounts with HSBC, VTB Deutschland and the National Bank of Kazakhstan Republic.

    About MICEX Group

    The MICEX Group is an integrated exchange that provides services related to electronic trading, clearing, settlements as well as depository and information services. The Group is comprised of the MICEX, the MICEX Stock Exchange, the National Mercantile Exchange, the MICEX Settlement House, the National Depository Centre, commercial bank National Clearing Centre, regional exchange and settlement centers, as well as other organizations. The Group serves over 1700 participants in the on-exchange market – leading Russian banks and broker companies from Moscow and other large financial and industrial centers of Russia. At present, the MICEX Group is the largest exchange in Russia, the CIS, Central and Eastern Europe.
    In terms of the volumes of on-exchange trading in securities, the MICEX Stock Exchange is among the worlds’ top 25 stock exchanges.

    About NDC

    National Depository Center (Closed Joint Stock Company) is the largest settlement depository in Russia, servicing on-exchange and OTC transactions with all types of debt and equity securities of Russian issuers. NDC provides storage of global certificates and depository accounting for 99% of corporate bond issues, sub-federal and municipal bond issues. It services 100% of transactions conducted in the federal bond and the Bank of Russia bond markets, more than 99% of transactions conducted in the corporate and regional bond markets, the majority of transactions with equities and also services UIT units and Eurobonds. The international rating agency Thomas Murray has assigned NDC an АА- rating as a central depository. NDC is Russia's national numbering agency, and the substitute numbering agency for the CIS, authorized to assign the international ISIN and CFI codes. Eddie Astanin is the company's Director General. Sergey Lykov heads NDC’s Board of Directors as a Chairman. NDC has 28.54% stake in Settlement Depository Company CJSC.

    About MICEX SH

    MICEX Settlement House (MICEX SH) is Russia’s largest non-banking credit institution specializing in providing settlement services to participants in financial markets of the Russian Federation. MICEX SH provides settlement services that meet present-day requirements for efficiency, continuity and operational reliability. In accordance with agreements concluded between MICEX SH and the Bank of Russia, MICEX SH acts as a settlement center for the organized securities market. The register of MICEX SH’s shareholders includes, among others, such companies as MICEX (88.709 %), ZAO UniCredit Bank (3.6 %) and Sberbank (2.267 %).

    Services provided by the MICEX SH are in high demand. Its clients number more than 880 major banks and financial companies from various regions of Russia, such as Sberbank, GPB (OJSC), Vnesheconombank, JSC VTB Bank, financial companies Troika Dialog and BCS Ltd., major foreign financial institutions subsidiaries, including CB “J.P. Morgan Chase Bank”(LLC), ZAO Citibank, Deutsche Bank Ltd., ZAO UniCredit Bank, ZAO Raiffeisenbank, Russian and foreign exchanges, the largest international brokerage company subsidiary “Cargill Yug. Ltd.” and other organizations.

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