Russian Settlement

1
Russian Settlement
2
Challenges

• Russian market is continuing to expand
• In general, Russian has proven a robust market
  with sustainable growth
• 3rd highest foreign currency reserves
• Strong budgetary and trade surpluses
• Market has been relatively insulated from
  sub-prime marking it as a safe investment
• Drivers for growth have shifted away from
  commodities to domestic industry
• EBS has launched electronic trading of physical
  RUB which will drive FX trading beyond direct
  commercial needs
• Market participants want to invest
• Variety of investment opportunities creates needs
  for physical FX
• Hedge Funds
• Asset Managers
• International Corporations
• Banks providing financing
• Interest in currency speculation is growing as
  well
• How can banks scale to meet demand?
• Variety of standards at local agents
• Manual processing still happening internationally
  and domestically

3
Ideal Solution

• Full adoption of a SWIFT standard message
  protocol inclusive of all details
• RUR6
• Fields 72 usage standardized
• CBR integration with SWIFT
• Real-time Gross Settlement at Central Bank
• Plan has been circulated
• Question of how long it will take for broad
  market adoption
• Puts Rouble on path to CLS admission

4
Can Intermediate Steps be taken?

• Use adaptable connectors to format messages
  specific to each party
• Dealers adhere to standard SWIFT protocol
• Adaptor reformats message to local agent
  preferred formatting SWIFT or non-SWIFT compliant
• Centralize Russian specific instruction elements
  (CBR account, VIN Code, INN, etc.) to reduce need
  to manually update and track records
• Centralize the translation
• Phase out the RUR6 protocol
• Instructions sent in English by banks
• Translated to Cyrillic by adaptor
• Provides transparency to both parties of the
  intent and the output
• Provides standard for instructing parties and
  ensuring clean instruction
• Ideally updates on payment status would be
  provided via the adapter as well
• Reduce the number of events at the local agent
• Enable netting of Ruble
• Provide full transparency to all parties
• Dealers
• Local Agent
• CBR

5
How Traiana can help

• Harmony Message Center
• Flexible connectivity parties put and take in
  their preferred format
• Industry familiarity with solution
• Central repository for mapping details between
  parties
• NetLink centralized netting
• Visibility to all interested parties
• Ensures parties agree netted values prior to
  submission to local agent
• Linked to Message Center