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MICEX-RTS Derivatives Trading Integration Planned

13.09.2011 15:33 / Interfax

MICEX/RTS Derivatives Committees will discuss derivatives trading integration, including the market outlook at the time of legal merger of the exchanges, slated for 19 December.

The plan that has been presented to the committees envisions two derivatives trading sections at the integrated exchange.

Section one of MICEX derivatives trading will consist solely of FX derivatives, short rates, stock derivatives and Federal Bonds, effectively a unification of the MICEX derivative markets. Section two of RTS derivatives trading will be split into three market – stock derivatives, FX and money market, as well as commodities.

The exchanges propose MICEX as the trading floor for the two derivatives sections, with RTS Clearing Center as the clearing house. Risk management systems and trading rules will differ in the two sections. Section one will be settled by the National Settlement Depositary, section two by the RTS Clearing House.

The stock exchanges see this derivatives market structure as key to keeping the workflow documents at a minimum, maintaining separate access rules in separate sections, ‘in order for market participants to avoid devaluation of status’, minimizing changes in trading and clearing systems of both exchanges, unifying standard amount contracts, terms and fees. This will also help perform a problem-free integration.

The action plan sees Friday, 16 December as the cutoff date for the evening session (currently RTS Derivatives), with the start for unified derivatives trading on 19 December, without product migration to one trading and clearing platform.

Further integration of the exchanges’ derivatives markets will continue until 2013. Analysis and choice of a common trading and clearing platform is planned for Q1 2012, and by mid-year the products will be unified. By the end of 2012 an integration of trading access rules is planned, with all trading participants in all derivatives sections of the new exchange finding common ground.

RTS and MICEX shareholders have signed a framework merger agreement on 29 June. Extraordinary shareholder meetings on 5 September approved the RTS-MICEX merger, greenlighting the legal procedure of exchange integration. FAS approved the merger on 9 September.

As planned, CJSC MICEX shareholders will approve the company reorganization into an open joint-stock company at an extraordinary shareholder meeting on 16 September, in order to float the integrated exchange in 2013. The same year will see the election of a new, post-integration MICEX Board of Directors.

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