1. Slide 1 31 st October 2007 John Falk, Securities Market Infrastructures SWIFT The role of ISO Standards in Russia

2. Slide 2 RU_Conference_20071031 Standards Do you care?

3. Slide 3 Investments into Developing Markets

4. Slide 4 No standards or many standards  Cost  Errors  Risk  Poor service –Unhappy customers

5. Slide 5 Why ISO Standards  Business clarity  Significantly reduces errors (STP)  Reduction of risk  Volume insensitive  Domestic and Cross border access  Reduction in costs overall

6. Slide 6 But…….  Business cases are difficult to build –Direct cost –Pressure to continue to use domestic standards –Local market practice easier to handle with domestic standards

7. Slide 7 A world without ISO and SWIFT Different Standards, Messaging & Connectivity Market Infrastructures eg CSD’s User

8. Slide 8 Single Window with ISO and SWIFT Reusing Standards, Messaging and Connectivity Market Infrastructures eg CSD’s User

9. Slide 9 Source: European Commission (2006). Harmonisation in Europe The possible GDP Effect

10. Slide 10 Benefits for all market players  Sharing information on how standards supports their needs  Centralised working group to address initiatives impacting institutions and their use of standards  Harmonisation of requirements for standards  Harmonisation of market practices

11. Slide 11 Russian Stock Market Infrastructure  6 Stock Exchanges  5 Settlement Depositories  80 Registrars  10 Clearing Organisations  300,000+ Investors  1,440 Broker/Dealers  483 Custodians  No CSD  Fragmented and product related settlement  Absence of mandatory DVP settlement in RUB (except for MICEX trades)  Foreign nominees are not recognised  No central source of information on corporate actions Source: National Depository Center Market Fragmentation

12. Slide 12 Инвесторы резиденты Инвесторы нерезиденты Банки- кастодианы Расчетные банки Реестры Международные клиринговые системы НДЦ Банк России РП ММВБ ММВБ Расчетные депозитарии ДКК Эмитенты РТС Другие биржи Брокеры/ Дилеры РП РТС Россия

13. Slide 13 Инвесторы резиденты Инвесторы нерезиденты Банки- кастодианы Расчетные банки Реестры Международные клиринговые системы НДЦ Банк России РП ММВБ ММВБ Расчетные депозитарии ДКК Эмитенты РТС Другие биржи Брокеры/ Дилеры РП РТС Россия

14. Slide 14 Standards in the Russian payments market - Domestic payments traffic via SWIFT exceeds cross-border - RUR6 is generally accepted in the market for Ruble payments - BIC identifier project with the Central Bank - Elements from RUR6 are used in RTGS project with the Central Bank

15. Slide 15 Standards in the Russian securities market (1) - MoU between SWIFT and FFMS signed in 2006 - SWIFT is part of the FFMS coordinative council for Russian securities market infrastructure - MoU’s has been signed with NAUFOR and PARTAD - The current version of PARTAD standards has been examined by SWIFT for ISO 20022 compatibility

16. Slide 16 Standards in the Russian securities market (2) Investment Funds - ISO 20022 should be used for investment funds messages in the Russian market - The first set of investment funds messages, with Russian market practice, are awaiting approval by the Funds working group - Investment Funds WG is collaborating closely with SWIFT Standards

17. Slide 17 Results of the Russian SMPG (SWIFT-RUS 4) - SWIFT–RUS 4 document approved, covering settlement messages in the Russian securities market (instructions, statements, confirmations) - SWIFT-RUS4 updates include: - message matrices - message flow examples - Collaboration with SWIFT Standards & Global SMPG on party identification for securities settlement “through” Registrars

18. Slide 18 Status of various initiatives using ISO standards RTGSGREEN SWIFT infrastructure implemented NDC/DCCYELLOW RUS4 approved and accepted by both organizations. Not fully implemented FFMSGREEN Cooperation continues. SWIFT is included on Coordinative Council PARTADYELLOW Existing use is not ISO compliant NAUFORYELLOW Work in progress

19. Slide 19 Инвесторы резиденты Инвесторы нерезиденты Банки- кастодианы Расчетные банки Реестры Международные клиринговые системы НДЦ Банк России РП ММВБ ММВБ Расчетные депозитарии ДКК Эмитенты РТС Другие биржи Брокеры/ Дилеры РП РТС Россия

20. Slide 20 Инвесторы резиденты Инвесторы нерезиденты Банки- кастодианы Расчетные банки Реестры Международные клиринговые системы НДЦ Банк России РП ММВБ ММВБ Расчетные депозитарии ДКК Эмитенты РТС Другие биржи Брокеры/ Дилеры РП РТС Россия

21. Slide 21

22. Slide 22 Next steps in Russia with Securities standards  Continued proactive participation in the standardisation initiatives of the Russian securities market  Further cooperation with FFMS  Participation in the CSD infrastructure project  Russian securities market participants to work within global SMPG

23. 15-19 September 2008 Vienna, Austria

24. Slide 24 Thank you for your attention

25. Slide 25 31 st October 2007 John Falk, Securities Market Infrastructures SWIFT The role of ISO Standards in Russia