The new system will be based on the UTS principles, providing all participants access to the liquid currency market. Trading in instrument “ruble/dollar” with today settlements will be held from 10:00 a.m., Moscow time, till 14:00 p.m. on the MICEX and till 11:00 p.m. on regional currency exchanges. Trading in instrument “ruble/dollar” with tomorrow settlements will be held from 10:00 a.m. till 16:45 p.m. on all currency exchanges.
Until recently, there have been two trading sessions on the MICEX: the afternoon session (SELT) and the Unified Trading Session (UTS). SELT was created as an analogue of the over-the-counter inter-bank market and was based on banks’ customary conditions of work within the bounds of set limits of net operations. UTS emerged in 1999 from the system of rigid currency control, imposed to help overcome the aftermath of the financial crisis. UTS secured access to trading for a widest possible circle of participants on the condition of preliminary deposition of funds.
The concept of uniting the existing trading session UTS and SELT was worked out as part of the program for the development of the exchange currency market. The concept is base on the following principles:
- trading is held in one trading system;
- participants of trading can carry out operations in UTS in US dollars on the condition of partial preliminary deposition of funds. Besides, participants of trading who participate in the risk coverage fund can carry out operations in UTS not only on the condition of preliminary deposition of funds, but also within the MICEX-set limits of net operations.
- in the course of trading in UTS in US dollars, participants can enter into transactions SWAP_USD/RUB_TOD/TOM.
- additional instruments are introduced in UTS: KZT/RUB_TOM, UAH/RUB_TOM, BYR/RUB_TOM.
According to the MICEX CEO Alexander Potemkin, the uniting of the two trading sessions is aimed at integrating the main advantages of UTS and SELT, including the wide geography of trading, trading in all market instruments, collective responsibility, based on risk coverage funds, and individual responsibility, based on the preliminary deposition of funds. The implementation of this project will help to preserve the attractiveness of the exchange currency market, raise the reliability of the risk management system and increase the general resistance of the settlement system to operational risks.
Background
Inter-bank trading in foreign currency is held on the MICEX, the volume of which reached 146 billion US dollars in 2003. Since 1992, the Central Bank of the Russian Federation has set the official exchange rate of the Russian ruble basing on the results of currency trading on the MICEX.
