By Andrei Skvarsky.
The Moscow Exchange is launching on March 25 a T+2 settlement system, an arrangement where payment for securities that have been bought must be made no later than two business days after the transaction.
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The exchange plans to simultaneously continue using its current T+0 immediate payment scheme until the end of 2013 but to adopt T+2 as the only system as from 2014.
Deferred settlements are a widespread international practice. T+2 is planned to be the only scheme in the European Union as of January 1, 2015, and is already used in Germany, Bulgaria and Slovenia.
The Moscow Exchange said in a statement that its deferred payments practice would be “a necessary step forward in making the Russian on-exchange infrastructure more competitive”.
“In addition, it will make Russian assets more accessible to foreign investors, enhance transaction efficiency for domestic brokers due to lower funding costs, and create opportunities for improving cash management and streamlining their business processes,” Russia’s main bourse said.
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