Foundation of the Association of Eurasian Central Securities Depositories

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Foundation of the Association of Eurasian Central Securities Depositories

The First conference of the Association of Eurasian Central Securities Depositories (AECSD) was held under the auspices of the National Depository Center (NDC) and Depository-Clearing Company (DCC) on January 22, 2004 in Moscow.

The main objectives of the conference were defined as: ratification of AECSD Foundation Resolution, formation of the Association management bodies and future steps definition.

The following entities became the founders of Association:

  • State CSD of Uzbekistan Republic
  • Depository-Clearing Company (Russian Federation)
  • Interregional Stock Union (Ukraine)
  • National Depository of Ukraine
  • National Securities Depository of Moldova
  • National Depository of Azerbaijan
  • National Depository Center (Russian Federation)
  • Republican Central Securities Depository (Republic of Belarus)
  • Georgian Central Securities Depository
  • Central Securities Depository (Kazakhstan)
  • Central Depository (Kyrgyzstan)

    Cooperation of CIS central depositories has a long history. In 2001 in Tashkent there was an international workshop held - "Integration of depository systems the basis for efficient cooperation on the international securities market".

    At that seminar professional market participants had the first chance to get a picture of stock market development level in the neighboring countries and paved the way for future cooperation. Later on the seminar has become annual: the 2nd seminar was held in 2002 in Almaty, the 3rd in 2003 in Baku and the last one was held on 23-24 September 2004 in Moscow. These meetings of major CIS infrastructure organizations reflected that in spite of legislation and technological issues, integration is in the air.

    Thus, the Association is expected to serve in all Members' interests and contribute to their economies. According to the Founders of the Association, its aim shall be the formation of a common depository environment, including harmonization of the regulatory and legal framework, development of an optimal recordkeeping system for securities market, organization of effective interaction among the member organizations to ensure efficient cross-border securities transfers. Moreover, the question of standardization of depository technologies, development of the electronic document exchange and adoption of international messaging standards for depository transactions, depository transactions is high on the agenda.

    Before the Resolution signing, representatives of Members, regulatory authorities and Self-Regulated Organizations gave a warm welcome to the conference. Opening the event, NDCs CEO Nikolay Egorov noted the importance of the Association foundation for the integration of CIS countries securities markets.

    According to Mr. Egorov, accumulated experience enables efficient exchange of project plans and technological schemes, realization of multilateral projects for stock markets integration and formation of the common depository environment. He expressed the idea that Russia is at the homestretch of setting CSD and the new Association should promote this process.

    "NDC is ready to provide further financial, intellectual and organizational assistance to the Association activity, and we are ready to hold the 2nd Conference of Association of Eurasian Central Securities Depositories at NDC premises" resumed Mr. Egorov.

    President of Depository-Clearing Company (DCC) Igor Moryakov stated that the foundation of the Association "will be the first step in Associations existence and now it's high time to realize all plans".

    First deputy Chairman of the Central Bank of Russia Andrey Kozlov noted that the Association should avoid playing politics and must concentrate on purely professional issues with the aim to improve national financial markets, harmonize the regulatory and legal framework and local depositories systems setting principals. Depository infrastructure, stressed Mr. Kozlov, should be well prepared for the upcoming integration.

    "Post-Soviet territories have a lump of common tasks in economy" said MICEX CEO Alexander Potemkin and "these tasks can be solved only in tight cooperation of our economies backed up by integration processes in different economical areas." During the speech Mr. Potemkin mentioned also the role of International Association of CIS Exchanges in integration development of CIS stock and currency markets. "We welcome establishment of the Association and will do our best to build efficient interaction mechanism between International Association of CIS Exchanges and AECSD" concluded Mr. Potemkin.

    The Director of PARTAD Infrastructure Institute Petr Lanskov paid attention to the fact that the regulatory authorities desire to build a single CSD in Russia coincided with the establishment of the Association. "These processes are linked to each other. And I hope that this mutual contribution will continue in the future - in Association activity and in development of Russia's depository infrastructure" stated Mr. Lanskov.

    He mentioned that PARTAD, specializing in elaboration and development of legal framework for securities market, would definitely benefit from cooperation with the Association in terms of accumulated experience exchange between the Association Members.

    According to the NAUFOR Chairman of the Board, Elena Avakian the core target for the Association should be the rule-making. "If all Members elaborated a common standard for CSD legal framework, itll simplify market participants activity. In this case, NAUFORs experience can be much useful" she told.

    On behalf of major Russian financial organizations members of SRO "National Stock Association" its President Konstantin Volkov spoke with a complimentary address. He told that the Association should assist in solving basic development issues of CIS stock markets, one of which for Russia would be building a single CSD. Such significant project should be based on CIS states experience with the main call for cost-effectiveness and investors rights protection.

    In conclusion of the ceremony Timur Jadgarov, one of the organizers of the first CIS CSDs seminar in Tashkent, welcomed the audience: "Id like to wish all the best for the Association and hope to see real results of Associations activity. They will come only after Associations recognition by the professional community and regulatory authorities as a professional, independent and competent body, when Associations opinion will have to be taken into account in decisions making that influences stock markets activity. All prerequisites are in place."

    After that the Resolution was successfully passed.

    After the break, Members of the Association discussed several issues that were put on the agenda. Accordingly the 2nd Association Conference is to be held in 2005 in Moscow and organized by NDC; delegates set up the Board of the Association, to be chaired by Nikolay Egorov of NDC; two Working groups were created: one for AECSD website construction lead by Nazokat Gafurova, the other for correspondent relations development lead by Boris Cherkassky.