Moscow. January 28. National stock market Association (NSMA), the big banks, the Finance Ministry and Central Bank are preparing a new money market instrument – a specialized certificate of Deposit, which would essentially be a hybrid of promissory notes and bonds, according to sources in the financial market.
The concept of a specialized certificate of Deposit (VTS) that will become a new instrument for Bank liquidity management, the APF has developed jointly with the professional community, with the participation of Bank of Russia.
As explained by the Agency with one of the developers of the VTS will be a derivative Deposit. “Legal entity, which puts a certain sum on term Deposit with the Bank, receives the paper – specialized certificate of Deposit certifying the rights to this Deposit. With this certificate he will be able to do everything you can do with securities – to sell, to mortgage, to inherit, etc.” – said the Agency interlocutor.
He noted that VTS is reminiscent of the Depository certificate, which is now stated in the Civil Code, but it has other peculiarities and treatment. “This is, in fact, hybrid bills and bonds, we can say that the electronic promissory note. Accounting and handling of the certificate will be that of bonds. SDS needs to realize all the benefits of bills and bonds and to remove their shortcomings,” – said the source Agency.
According to him, in the West the market for tools like that is tens to hundreds of billions of dollars. How will the fate of the VTS in Russia, it is not clear, it depends on what the tool will output after the adoption of the necessary amendments to the legislation.
It is anticipated that the certificate will be in demand among Russian companies, it can also become a tool of interbank lending. In the future, the VTS may be displayed on the exchange.
The Agency hopes that the tool will be in demand, since the market is the initiator of its creation.
Another source reported that SDS will be a documentary security payable to bearer with obligatory centralized custody. The transfer certificate will be effected solely through the accounts of depot in the Depositary. That is, the certificate owner will actually be uncertificated securities.
The maturity of the VTS will be up to 6 months.
The need for this instrument arose due to the lack of money market instruments and prospects reduce the amount of liquid cash collateral from the banks. In particular, banks report a shortage of short-term and medium-term financial instruments and reducing the amount of liquid collateral in the form of securities, most of which banks use in transactions direct repo from the Central Bank and the Federal Treasury.
The Association prepared and agreed at the Finance Ministry and the Federal service for financial monitoring, the draft Federal law on VTS, in particular, will be amended in the second part of the Civil Code.