The Central Bank has developed new rules of capital calculation

The Central Bank (the CB) has implemented new rules of capital calculation. It is suggested to take into account the assessed value of securities, have been recorded in the depository, as well as reliability index of the person involving in rights record keeping where the account of deposit was opened. In the explanatory note the CB marks that change in the capital calculation will not be resulted in increase of load upon capital of depositories not using the practice of creating an “endless” chain of owning, as well as for those who open accounts of deposit only in highly reliable accounting organizations, such as the Central Securities Depository, Settlement Depository or Registrar.

The measurers offered are aimed to prevent the withdrawal of clients’ money. Today there is a possibility of creating the “endless” chains of owning, that means not only the significant increase of operating risks for securities market’s participants, but also the possible loss of securities by their holders. The CB representatives note that non-transparency of the securities rights accounting makes the supervision on market’s participants complicate.

The Central Bank is overly concerned with the problem of depositories’ qualification after the bankruptcy of five banks controlled by Matvey Urin. The bankruptcy cost 10,3 bln. RUB for the Deposit insurance agency. Back then the established pattern of fictitious securities purchase was used to siphon the deposits off “Urin’s banks”. After the uncovering of that system, the CB management decided to increase reserves for securities, accounted in doubtful depositories.

The experts note, that the adopted requirements of keeping securities in small depositories (with the capital up to 350 mln. RUB) appear to be blocking-off, because of the necessity to reserve 50% of the assets value in the nominee account. The blocking-off is significantly lower (0,01% of the assets value) for depositories with the capital of 350 mln. to 1 bln. RUB. But it also can be sensitive for some participants.

At the same time, the document is not obliged to keep all securities in major depositories. In case someone decides to keep securities in small little-known depository, there must be capital to cover potential losses. Therefore, the experts agree that the submitted document is a try to limit cases of securities keeping simulation.