Sova Capital has become the first international Individual Clearing Member (ICM) firm on the Moscow Exchange’s Derivatives and FX Markets, as a direct member of the National Clearing Centre (NCC), MOEX’s CCP.
Sova Capital has become the first international Individual Clearing Member (ICM) firm on the Moscow Exchange’s Derivatives and FX Markets, as a direct member of the National Clearing Centre (NCC), MOEX’s CCP.
The significance of this market structure development resides in the NCC historically requiring clearing member firms to be Russian regulated legal entities and therefore client collateral had to be held at a Russian entity, in order to trade, however, with Sova Capital, a UK headquartered and FCA regulated entity, becoming the first international ICM on MOEX, this requirement no longer needs to be fulfilled. Instead, collateral can be held by an international entity directly at the CCP, removing the credit risk exposure to Russian clearing brokers, and has been designed with the FCA’s Client Asset Segregation rules in mind.
Grigoriy Kozin (pictured), Head of Prime Services at Sova Capital, says: “As the No1 ranked participant on MOEX’s Derivatives Market (2019), we are proud to be the first individual ICM and are confident that this innovation brings significant value to our clients. It also demonstrates the positive steps that the Moscow Exchange has taken to accommodate a wider international client base. In addition, we look forward to becoming an Individual Clearing Member on MOEX’s Equity Market later on in the year when this becomes available”.
“We welcome Sova Capital as the first International Clearing Member on our Derivatives Market. The opportunity to clear trades internationally, directly against the National Clearing Centre, lowers both the risk and costs of trading on MOEX’s markets. This model was implemented first at MOEX in FX and will be extended to Equities, Bonds and the Money Market in the summer, meaning all MOEX markets will have an option of remote clearing membership with the same design,” says Igor Marich, FX and Money Market Managing Director at Moscow Exchange.
