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FAS Approves MICEX-RTS Merger

09.09.2011 15:00 / Interfax

The Federal Ant-Monopoly Service (FAS) of the Russian Federation has approved the MICEX acquisition of RTS, issuing a competition protection order, says the FAS release.

CJSC MICEX has filed for the acquisition of 100% voting shares of RTS, 100% voting shares of RTS Settlement House, 100% voting shares of RTS Clearing Center, 97,76% voting shares of Depositary Clearing Company and CJSC MICEX reorganization by merger with OJSC RTS.

“The transactions stated in the appeal will reinforce the dominant position of MICEX Group in the securities and derivatives trading market, and will also reinforce the dominant position of National Settlement Depositary in the settlement depositary market segment of the depositary market”, says the release.

However, these transactions will not eliminate competition in the securities and derivatives trading market and the settlement depositary market segment of the depositary market.

FAS has simultaneously issued a competition protection order to MICEX for stock exchange policymaking, including fees.

CJSC MICEX is instructed to ‘pass service fee increase and/or introduction decisions for share, bond (excluding state bonds), derivatives, REPO trading only if such decisions are pre-approved by a ? majority vote of the advisory board’. The advisory board should include no less than 15 clients of the exchange (forming no less than ? of the board), accounting in aggregate for a minimum of 50% of overall annual trading volume at MICEX.

Similar restrictions are imposed on MICEX and RTS stock exchanges.

The settlement depositaries of the stock exchanges – National Settlement Depositary and Depositary Clearing Company are instructed by FAS to form advisory boards from both depositaries’ clients, with ? of the board accounting for a minimum of 55% annual service fees. Fee increase or introduction decisions are to be approved by a ? majority vote of the advisory board.

The FAS decision is the last administrative barrier for the MICEX acquisition of 100% RTS shares. MICEX has filed for FAS approval in July, however on 2 August FAS delayed the decision by 2 months. As Head of MICEX Ruben Aganbegyan said earlier, legally RTS will merge with MICEX by the year-end.

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.

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.

Trading infrastructureProject Group №1Ruben Aganbegyan