Moscow Exchange Implements T+2

The move is ahead of wider shifts to T+2, in an attempt to bring a fragmented settlement landscape into a harmonized environment. Currently, depending on jurisdiction, trades in certain instruments can settle anywhere from T+2 to T+3, T+7 or more. Curiously, though, Moscow is extending its settlement cycle rather than shortening it, as is the norm across global markets.

Previously, full advance deposits of cash and securities were required on Moscow Exchange, essentially making the environment T+0. The bourse believes that extending settlement dates will allow it to be become more competitive, as participants will only be required to partly post collateral in order to execute trades. The roll-out will be phased, with the 15 most liquid stocks initially affected, and others gradually brought to T+2.

"The system of pre-payment for trades played a positive role as the Russian securities market was getting off the ground," says Alexander Afanasiev, CEO at Moscow Exchange. "Trading in Russia is now integrated into the global financial markets and our issuers expect the latest in settlement and risk management tools. The globally recognized T+ settlement model lowers costs for market participants, increases efficiency of deployed capital and will lead to higher trading volumes. This system is already in place on Moscow Exchange's foreign exchange market; now has come the time for it to be implemented on the equities market."