A follow-up to LeapRate’s earlier report about Russia’s National Settlement Depository (NSD), part of the Moscow Exchange group of companies, launching a new service enabling the processing of client cross-currency settlements – payment versus payment (PVP-1)…
NSD announced on Tuesday that the first PVP-1 settlements were successfully conducted by JSCB Derzhava PJSC and PJSC JSCB Metallinvestbank on April 26, 2016.
Payment-versus-payment (PVP) is a cash settlement principle enhancing the reliability of settlements and assuming that a participant’s cash transfer in one currency occurs if another participant’s cash transfer in another currency takes place simultaneously.
NSD clients using this service avoid risks of mistiming when executing counter instructions, and do not have to settle on the ‘split’ terms.
The PVP settlement service is provided to credit organizations only. PVP operations may be conducted only through correspondent and trustee accounts opened by the credit organization with NSD. The list of currencies for PVP operations includes: Russian rubles, US dollars, Swiss francs, British pounds, Chinese Renminbi and Hong Kong dollars.
You can view the official announcement from NSD by clicking here.