Translation. Region: Russian Federal
Source: Moscow Exchange – Moscow Exchange –
An important disclaimer is at the bottom of this article.
The first transaction in Russia – an interest rate swap using pension reserve funds – was concluded on the standardized derivative financial instruments (SDFI) market of the Moscow Exchange.
One of the parties to the transaction was the management company “Progressive Investment Ideas”.
Pension reserve management is one of the most conservative segments of the Russian pension industry. The SFI market allows institutional investors to effectively use derivative instruments to manage pension fund assets, minimizing risks. The first successful transaction on the market using pension reserves confirmed this in practice.
Funding of operations on the SFI market using pension reserves became possible thanks to the joint efforts of the Bank of Russia, the professional community and the Moscow Exchange, aimed at preparing the necessary regulatory and technical framework.
Roman Loktionov, Director of OTC Derivatives at Moscow Exchange:
“The entry of pension reserve funds into the SPF market is an important event for the entire financial market, contributing to the growth of liquidity and expansion of the number of market participants. In addition, the use of SPF market instruments in asset management allows pension funds to flexibly respond to changes in the market environment, adapting their investment strategies to current conditions. Fixing rates using interest rate swaps has provided NPFs with a competitive advantage and the opportunity to offer more favorable conditions to their clients.”
Alexey Stulov, representative of the management company “Progressive Investment Ideas”:
"The instruments of the SFI market provided the opportunity for flexible interest rate risk management. The transaction required regulatory support, organization of accounting and control in accordance with the requirements of the legislation, which was carried out thanks to the coordinated work of specialists from the company Alor Broker, NPF VTB Pension Fund and the specialized depository Infinitum with the active support of colleagues from the Moscow Exchange and Sberbank."
The interest rate swaps market provides management companies with modern instruments for hedging interest rate risks and optimizing investment strategies, which is especially important in the context of high volatility of financial markets. The use of interest rate swaps allows for more flexible work with long-term obligations and successful management of investment portfolios.
On on the Moscow Exchange's SPF market Interest rate swaps, currency swaps, currency-interest rate swaps, currency forwards with a maturity of three days to 10 years depending on the type of instrument are traded. Transactions on the SPFI market are concluded with a central counterparty. This eliminates the need for market participants to assess the risks of each counterparty and sign general agreements with all of them, reduces capital costs and takes advantage of unified clearing and collateral with other Moscow Exchange markets.
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