Otkritie launches Russian trading platform for international investors
Otkritie, a brokerage that provides direct market access to Russian equity markets, has launched a trading platform that aims to provide greater transparency and cost efficiencies for international investors trading directly into Russia.
The new platform, which is backed by an international custodian, allows the straight through processing of electronic orders onto MICEX and settle into a third party custody account.
The platform eliminates the requirement for investors to pre-deposit their assets with the executing broker or pay for financing while enabling them to use one of the largest custodian banks in Russian equities markets.
Up until now, the most transparent route for investors into the Russian market has been through the process of DMA, as it offers direct access to exchange liquidity. However, issues have remained as the MICEX is a T+0 market, meaning that stock/cash must be pre-delivered before the execution of trades can occur. Therefore, market participants have been required to make free-of-payment deliveries of stocks/cash pre execution and accept the associated risks, or pay for broker financing.
Otkritie’s new platform eliminates the problems associated with electronic trading in Russia resulting in greater transparency and cost efficiencies for investors. It also provides Financial Services Authority-regulated direct interaction with MICEX and offers insulation from much of the credit and operational risks associated with existing DMA models.
Roman Lokhov, head of global markets and investment banking at Otkritie, says: “This is a hugely significant development as, for the first time it presents international investors with the opportunity to trade in Russian equity markets in an all-encompassing clean, transparent, cost effective and direct manner – while buttressed by a tightly regulated environment.
“We believe we have dealt effectively with the age-old problems surrounding execution and custody in Russian equity markets, and that this solution will allow our clients to meet their best execution requirements. This is the final logical step in bringing Russia as close as possible to international best practice trading standards.”
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