“Today’s model of taxation and tax administration for foreign nominee accounts is a de facto entrance barrier. At the same time, the Ministry of Finance is reportedly considering an upgrade of this model to make it more flexible and effective, in line with global market practice. This is inspiring news”, he said.

According to him, the procedure of collecting documents for tax rebate on income received by foreign investors may be simplified, as most of the administration will be performed by the foreign nominee account owner according to tried and tested procedures that exist in other markets.

Astanin stated that NSD had recently opened nominee accounts for Euroclear and Clearstream, simplifying foreign investors’ access to the OFZ market. “A month later, we see the accounts working and there is an outcome. If you look at the OFZ yield curve from last August to March this year, you will see a decline. It fell lower than the initial forecast of 50 basis points. Minfin as an issuer got the desired effect. At the same time, the liquidity drain risk, feared by some market participants, failed to materialize. Our next step forward is access to corporate, municipal bonds and shares”, he remarked.

NSD Head also said that over 6 trillion Roubles worth of securities have already been transferred to nominee accounts at NSD from registrars. “In November, when we were assigned Central Depositary status, NSD accounts held assets worth some RUB 9.5 trillion, and now we have passed the RUB 16 trillion mark. Concentration is in progress, this was one of the Central Depositary project goals – centralization and finality of settlement”, said Astanin. He added that some RUB 2.5 trillion had come from the Depositary Clearing Company.

“We plan to make a major thrust forward by end-March, to open nominee accounts at the registrars of practically every public company that qualifies as ‘top tier’ – with a prospectus, transparency, etcetera”, he said.

Astanin stressed that despite the fact that NSD has a year to open nominee accounts, “the task was preparing infrastructure for state company IPO privatizations, and in this regard the task will be accomplished”.

It has been reported earlier that in February, following consultations with custodian banks and registrars, NSD approved a detailed roadmap of mass asset transfers from registrars to the central depositary. The roadmap deadline for the main bulk of the transfers is Q1 2013.

Trading infrastructure, Project Group №1