Equity and bond markets have completed their first day of trading under T+2, or settlement two days after trade date, on the Moscow Exchange.
Previously, the markets operated on a T+0 basis, with full payment for and delivery of securities on the same day of trade. Volumes were lower than usual on the exchange, although it pointed to the US Labor Day holiday as the reason.
"We thank participants for their prompt technical support of end users, who updated their trading terminals and reconfigured them during the first trading day under the new mode," says Moscow Exchange, in a statement. "The Closing Auction was held to define a representative closing price for the first time. A new algorithm was adopted that uses the principle of random auction termination, which precludes the market price from being artificially increased or decreased."
At a time when discussion over reducing the settlement cycle for US and European trading is underway in full force, Moscow Exchange is unusual for increasing it. The move, it says, is designed to align it with market practices in other markets, and increase its competitive ability.
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