OREANDA-NEWS. December 3, 2008. The National Depository Center (NDC), Russia's only settlement depository servicing the full range of debt and equity securities of Russian issuers, and Russia’s Professional Association of Registrars, Transfer Agents and Depositories (PARTAD) announced today that they have agreed on a program to promote improvements in Electronic Data Interchange (EDI) standards in Russia’s financial market. According to the results of the negotiations held in November 2008, the parties have agreed to coordinate their efforts aimed at implementation of EDI between all categories of market participants on the basis of Straight Through Processing (STP). The coordination of the efforts will be based on the following five principles:

1.      Focusing on results. The process of EDI implementation in the Russian market has taken over 15 years thus far. The joint contributions of NDC and PARTAD have led to the development, approval and implementation of unified EDI standards for core participants in Russia’s settlement system including settlement depositories, custodians and registrars. NDC and PARTAD intend to do their best to improve the quality of services and increase the amount of data processing in this segment.

2.      Strengthening of Russian market’s competitive advantages. Most Russian securities are issued in electronic form. The parties assume that this significant competitive advantage should be efficiently used in the implementation of further plans for the development of an international financial center in Russia.

3.      Optimal balance between Russian and international standards. Efficient integration of the Russian market into the global system is not possible without usage of international standards in the financial market and adaptation of national standards to the foreign investors’ requirements. The parties stressed that according to foreign experts a considerable part of Russian internal EDI standards already conforms to international requirements. In particular Russia was one of the first countries which accepted ISIN (ISO 6166) and CFI (ISO 10962) codes as a basis for its securities accounting. Thus the principle of the national EDI standards’ strict conformity with international practice and with ISO standards should be used by all Russian market participants and their associations involved in EDI implementation. NDC and PARTAD agreed to exchange EDI standards implementation programs in order to take into consideration expert opinion and the practices of the companies’ partners in Russia and abroad.

4.      STP development. EDI is one of key factors of STP implementation. In its turn STP provides for:

-   business scalability,
-  decreased operating risks,
-   increased numbers of operations simultaneously with lower data processing rates and operating costs,
-  increased efficiency for all market processes.

Accordingly the parties have affirmed their willingness to support the implementation of programs aimed at implementation of STP in the Russian financial market.

5.      Increased efficiency in interactions. The parties confirmed their commitment to the basic principles of cooperation aimed at increased efficiency in interactions between market participants including improved corporate governance, increased transparency of decisions, compliance with ethical standards, improvements in technologies and legislation. NDC and PARTAD regard these tasks and principles as challenges for both Russian and other countries’ financial markets. In particular, the managements of NDC and PARTAD will do their best to provide agreeable terms for cooperation aimed at the achievement of positive results, improvement of EDI and regulations on the Russian market.

Nikolay Egorov, Director, NDC, pointed out: “NDC and PARTAD play a leading role in the development of Russian EDI standards. Currently and in the future, the financial infrastructure can not allow itself to have multiple technological standards. Consolidation, integration and unification are not just words; they are supported by technical solutions, organizational principles and first of all by standards. It was very important to agree on unified principles and ISO priority, in other words, on the adaptation of international standards to Russian legislation, the Cyrillic alphabet and other special issues.”

Viktor Pleskachevsky, Chairman of the Board of Directors, PARTAD, added: “Development of professional standards has been a core area of PARTAD activities for almost 15 years. In recent years the issues of unification of EDI have been becoming more and more important. PARTAD’s efforts in the field of electronic document format development became more important after approval of new versions of the Law “About Investment Funds” and the Law “About Non-State Pension Funds.” A mutual understanding with NDC as a settlement depository able to be one of the most important ‘gateways’ providing for the conversion of national standards into the international ones and vice versa allows PARTAD and NDC to focus on the unification of electronic messaging on the basis of ISO. PARTAD and NDC will be preparing necessary changes to the current regulatory system. PARTAD is also planning to interact with other centers of EDI unification.”