Moscow Exchange to halt FX trading on BKTRUB_TOM from Nov 3, 2014

Ever evolving Russian electronic trading marketplace Moscow Exchange (MOEX) announced earlier today that it will stop trading in BKTRUB_TOM on its FX market from November 3, 2014. The decision has been made during a meeting of MOEX’s Forex market committee on October 27.

The result of this is that with effect from next Monday, MOEX participants will no longer be able to trade with this instrument, which in its essence is a bi-currency basket, including the USD and the EUR. Traders of BKTRUB_TOM buy US dollars and euros simultaneously while paying for them with Russian Rubles, with the settlement being on the next day (this is where the TOM abbreviation comes from).

The report from the Committee’s meeting does not specify any arguments for the decision taken. However, speaking to Interfax, one of the Committee’s members – Sergey Romanchuk, explained that the main reason for the halt was the lack of interest from FX traders into this instrument. He noted that trades with BKTRUB_TOM are rare, in the face of the importance of this instrument for the decisions of Russia’s Central Bank. It is according to BKTRUB_TOM that the bank makes its intervention calls.

Trading with BKTRUB_TOM started in October 2011, with trading with the instrument seeing its ups and downs along the way. Lately, however, FX market interest into it has fallen. Data from MOEX shows that the last trades with BKTRUB_TOM on MOEX’s FX market were executed on June 25, 2014. Their volume was RUB 4 million, according to estimates by – a meager sum, if we consider that the minimum volume of one trade with this instrument is RUB 100,000.

You can read the official MOEX announcement on the exchange website by clicking here.

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