A participants view of BESP

Sergey Romanchuk, Deputy Head Of TreasurySCB Metallinvestbank, President ACI Russia.

7th Russian Ruble Settlement Forum, London, 14.04.2010

ACI Russia:

7th Russian Ruble Settlement Forum, London, 14.04.2010

- affiliated with ACI – The Financial Markets Association, the largest wholesale association on the international financial market, with about 15 000 members from 80 countries, with 68 national associations .

- assists Russian banks and other financial institutions to become the part of the international financial market;

- conducts seminars, meetings and other events devoted to the problems of the international foreign exchange market, the national economy and the banking system;

- provides the network for the technology interchange;

- works as gateway to Russian FX&MM for foreign companies.

- you could contact ACI Russia on any queries and for the help regarding Russian market: council@aci-russia.ru, www.aci-russia.ru

Joint Stock Commercial Bank Metallinvestbank:

7th Russian Ruble Settlement Forum, London, 14.04.2010

- is one of the largest operators of the Russian foreign exchange market according to the volume of trading;

- serves a lot of correspondent accounts of variety Russian and international banks;

- is a market maker for the most of existing electronic platforms where RUB is trading (MICEX, ICAP EBS, CME, RTS) ;

- is trying to be on the edge of the technical decisions, providing trading and settlements in rubles;

- is consistently working on developing Russian FX and MM, supporting markets initiatives;

-is one of the first “participants” of the BESP (July 2007), but is not actually working yet!

- contact us rsa@metib.ru

Problems and weaknesses of the BESP application:

7th Russian Ruble Settlement Forum, London, 14.04.2010

- the “critical mass” of the system participants is not enough for the start of the self supporting process; a lot of banks announced as BESP participants are not actually using it;

- the were no incentives for the migration to the BESP in the Moscow region; the current shift system is covering most of the customers needs;

- The tariffs policy of the BESP is not stimulating;

- the costs of the development and support of the two payments systems at the same time in banking software are very high; there are no IT products ready to use; the intraday liquidity is divided between two systems.

- BESP participants, currently using it, report technical failures;

Tariffs of the shifts system and BESP

7th Russian Ruble Settlement Forum, London, 14.04.2010

I. Shift payments inside the Moscow region - first period of time 5,00- second period of time 7,60 - third period of time 10,10 - after 15,10

III. Payments via BESP 1) Electronic payments of direct market participants

urgent payments 30,00 payments on general conditions 25,00

Discounts in the BESP

Number pf payments Discount rate, %

От 5001 до 10000 0,1%

… …

More then 40001 (maximum discount) 0,5%

Progress on the BESP application:

7th Russian Ruble Settlement Forum, London, 14.04.2010

- there is the Associate Member Participant (AMP) status, which solves some problems: it is easy for implementation, liquidity is on the one account;

- all banks will become AMP automatically in the August of 2010, even not doing anything; clients could ask for BESP service from any bank;

- The ability to use BESP gives some favors to the participants already (settlements to MICEX)

- CBR is thinking about measures to support DMP (Direct Member Participants);

- CBR announced that BESP will become the prime system for large interbank transactions;

- the payments order’s format will be moved to the form to match SWIFT requirements; the final compatibility is planed on for August 2011;

-CBR has a goal to include RUB to the list of CLS currencies;

Prospects:

7th Russian Ruble Settlement Forum, London, 14.04.2010

- BESP will be the main settlement system in Russia in 2011

-Prime Brokerage service for FX RUB trading will become available soon

- RUB will be CLS currency in the reasonable future

- All this will help RUB to become the really international currency