Moscow Exchange, or Moskovskaya Birzha MMVB-RTS PAO (MCX:MOEX), the biggest Russian venue for trading Forex, stocks and derivatives, today announces a set of pending enhancements to its Forex offering.
From July 4, 2016, MOEX will offer new opportunities and services to FX Market participants. The Exchange will expand its FX product offering, introduce new services to member firms and their clients, as well as improve the risk management system.
- Deliverable futures
Deliverable futures contracts on USD/RUB, EUR/RUB and CNY/RUB currency pairs will be launched. The contract lot will be 100,000 currency units, with a tick size of RUB 0.01 for USD/RUB and EUR/RUB and RUB 0.001 for CNY/RUB. Contracts will be settled quarterly on fixed dates. The new deliverable futures can be offset with swaps on the same underlying assets.
- New currency pair
The CHF/RUB currency pair will be launched to calculate risk parameters for CHF-denominated bonds, in order to admit these bonds to repo with the CCP and make the currency eligible as collateral.
In the beginning, MOEX will offer instruments with TOM and TOD settlement, as well as swaps.
- Risk management
Collateral requirements will be reduced for opposite positions in EUR and USD thanks to an inter-product spread, allowing trading firms to reduce their funding costs. To unify collateral calculations, interest risk will be considered for TOM positions and margin requirements will be issued for overnight swaps similar to long-term swaps.
To manage client risk, trading accounts will be registered for second and third tier clients, providing brokers with access to the Exchange’s risk management tools and enabling them to keep records of clients’ positions. Settlement and collateral nettings will be available under the settlement code in which the positions of different clients are recorded.
The opportunity to withdraw funds up to the same amount as the surplus in their current position means participants will be able to manage their assets more effectively within a day and continue with TOM settlement trading.
As MOEX continues to roll out segregated accounts to end-clients, brokers will be enabled to see payment details so that they can check whether a beneficiary and a segregated client are the same person, meaning that funds of segregated clients can be protected.
Alexander Afanasiev, CEO of Moscow Exchange, says,
“In recent years, Moscow Exchange’s FX Market has transformed from a segment of the domestic interbank market to the global trading platform for ruble operations. Today, it is the main marketplace for FX transactions and the centre for establishing the national currency rate. The market enhancements we are announcing today will create new business opportunities for market participants and their clients in FX trading and risk hedging, with fast and effective technology providing new strategies to combine spot and long-tenor FX instruments. This will facilitate market liquidity, and reduce costs and risks for Russian and international participants.”
For the official announcement from the Moscow Exchange, click here.