OREANDA-NEWS. May 20, 2011. ING Commercial Banking Russia (“ING CB”, legal name “ING BANK (EURASIA) ZAO”) has become the first Russian custodian to have joined the framework agreement with the National Settlement Depository (NSD) which allows to organise efficient interaction with the registrars by means of digitally signed electronic documents. In such a scheme the NSD would act in the capacity of a transfer agent of registrars. Five major registrars have already joined the project now and four more registrars are going to enter into the agreement in the near future, more registrars joining at a later stage, reported the press-centre of ING Commercial Banking.
 
Before that the market did not have a single access point to the registrars and unified rules and requirements towards the documents flow between the registrars and the custodians, therefore the electronic communication with the registrars could not be developed efficiently. Thus, the interaction with the registrars has been mostly manual bearing significant risks for custodians and their clients.
 
At the initial stage the electronic interaction shall cover the disclosure of beneficial owners entitled to participate in corporate actions. This is one of the most sensitive areas between registrars and custodians. The new procedure presumes an electronic encrypted version of the disclosure to be delivered in a “sealed" electronic envelope by the NSD to the registrar. It is only the registrar who would be able to open, decrypt and process it.
 
At the later stages of the project it is planned to automate the processing of re-registration both in terms of transfer orders and settlement notifications, for which the current market practice is to have them in form of paper originals.

ING CB took the key role in realisation of this project by lobbying the initiative at all levels and proactively contributing to the elaboration of the legal, operational and technical requirements of the flow. The framework agreement is open for other market participants and will become the basis for further market infrastructure development and integration.

Natalia Sidorova, Head of Securities Services ING Commercial Banking in Russia, comments:
"We are glad about the successful implementation of the first stage of our joint project with the NSD on the launch of a single entry point for the interaction with registrars via electronic document flow. Such interaction is especially vital within the current immature and fragmented market infrastructure and will allow to mitigate operational risks of the market participants, as well as to decrease their costs. We are also pleased that ING Commercial Banking has become the first custodian to have joined the framework agreement on electronic document flow with registrars that have already joined this project".