Clearing equity trades in Moscow has never been as quick and easy a business as in other emerging European equity markets such as in Poland or Hungary. Failure of trades - when purchased shares are not delivered or sold shares are delivered but no cash is received - has plagued the Russian equity market for some time.
But over the past year the situation has improved. From August, RTS, which is responsible for over 70% of reported Russian equity trading, will require that transactions involving six blue-chip shares must be cleared through the Depository Clearing Company, known by its Russian acronym DKK. The six stocks account for over 80% of the dollar volume of Moscow based equity trading. RTS is expected to add more shares to the list until virtually all RTS transactions are cleared through DKK.
Dmitri Ponomarev, president of RTS, says: "This step will further reduce any counterparty risks involved in trading Russian equities."
RTS started life in 1993 as a professional securities association and has since become the most influential trading system in Russia. But there are three other major depositories in Russia: Unexim Bank, the National Depository Centre and the Depository & Clearing Union.