NSD begins electronic matching of OTC derivatives trades
National Settlement Depository (NSD), Russia’s central securities depository, has started applying the electronic matching procedure for all counterparties' potential counter clearing and settlement instructions for OTC securities trades (starting as of 21 December 2015).
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Previously, this service was optional for the NSD clients.
The electronic matching service allows NSD to more quickly identify potential discrepancies in the counterparties’ counter instructions on trades; this significantly reduces non-performance risk.
When trade participants make a transaction on the OTC market, and their instructions do not match (for example, having different settlement dates or wrong transaction sums), they have to spend time searching through the large volume of counter instructions, communicate directly and correct the parameters of each trade manually.
Once the electronic matching service has been launched, NSD clients will be able to mitigate the risk of non-performance of settlements due to the reduced time required for searching and correcting counter instructions with the wrong parameters.