GoldenSource has secured a contract with Russia’s National Settlement Depository (NSD), which will use the vendor’s enterprise data management (EDM) platform for the distribution of automated corporate actions data across the Commonwealth of Independent States (CIS).
The contract was signed last week and the parties expect to have initial elements of the system up and running by the end of this year. An automated service covering most corporate action types is planned to go live in about 18 months’ time.
NSD considered a number of data management providers including GoldenSource, Markit EDM and Asset Control before selecting GoldenSource on the basis of its local presence – it already has a handful of customers in Russia, including investment bank Sberbank; its local partner, Neoflex; its experience in corporate actions and the inclusion of a data model that can support strong governance in its solution.
Neil Vanlint, managing director of EMEA and Asia at GoldenSource, explains: “There is no real infrastructure for corporate actions data in the CIS at the moment. Events are often published in local newspapers. This means investors lack information and are not comfortable holding equities. Using the GoldenSource EDM platform, NSD customers and market participants will be able to contribute data to the depository and it will then be distributed using the Swift IS0 15022 messaging format as electronic corporate actions data.” Initially, data will be contributed manually to the data management platform, although electronic contribution is expected to follow as the system and market develop.
The aims of the NSD, which was assigned the status of central securities depository by the Russian Federal Financial Markets Service’s order in November 2012, are to increase market transparency, improve investor confidence, bring more investors into Russia and the wider CIS, and generate revenue. Eddie Astanin, chairman of the executive board at NSD, says: “There is great demand from our clients and investors for timely, reliable and well-structured corporate information in the Russian market. As Russia’s central securities depository, NSD has invested much work and significant resources and time in this project. We plan to use GoldenSource’s industrial platform to create services that are highly sought by our clients and to generate added value in the market.”
Michael Meriton, president and CEO of GoldenSource, adds: “GoldenSource’s architecture enables exchanges, depositories and other service providers to offer new services to their customers, which not only generates revenue from their data, but also enables operating efficiencies for participating financial institutions. NSD is well suited to offer this service for Russian securities. It will benefit market participants, especially custodians, and the Russian market overall.”
For GoldenSource, the contract demonstrates the value of data management solutions beyond their traditional role in banks and through the capital markets supply chain. It could also be an opening to manage different types of NSD reference data over time, and with NSD being part of the Moscow Exchange Group, there may be opportunities to expand further. As Russia realises the benefits of opening its markets and becoming a global player, Meriton concludes: “This is a large market and we are working on several other opportunities.”