From the date of its inception in 1995 Russian Trading System has been accepting non-anonymous offers without preliminary deposition of securities and cash assets (quote-driven trading model). This model allows the exchange to facilitate trading in the widest range of securities.
The main advantage of the quote-driven trading model is the ability to "improve the price" by calling the party that submitted a quote and agreeing to execute the trade within the spread. Such an ability is important for trading in less-liquid securities that might have large bid/ask spreads. Knowing the counterparty to the trade is also important to manage risks associated with trading without preliminary deposition of securities and assets. Plus, it helps parties to come to an agreement involving non-standard settlement schemes.
However, if standard conditions and quoted price are fully acceptable, a participant can execute a transaction electronically without calling the other party, by just clicking the mouse on the appropriate field in the workstation.
| Quote-driven trading = Absense of the prefunding + Opportunity to negotiate + Flexible settlement terms |
RTS Classic Market Trading Platforms
| Trading Platform |
Order-Driven |
Quote-Driven |
| Beginning |
2005 |
1995 |
| Used model |
Order-driven |
Quote-driven |
| Traded Securities |
7 "blue chips" |
All the other stocks and bonds (500) |
| Currency of offer |
USD |
USD |
| Settlement cycle |
T+4 |
Varies from T+0 to T+30 |
| Clearing center |
Joint-stock Company "RTS Clearing Center" |
N/A |
| Registration of traded securities |
Depositary-Clearing Company |
Any depositary or registrar |
| "Delivery Versus Payment" |
Mandatory |
Optional |
| Settlement Bank |
JPMorgan Chase, Citigroup or RTS Settlement Chamber |
Any bank |
| Settlement Currency |
USD |
USD or RUR |
Trading
Quotes are accepted through RTS Plaza workstation. The minimal trading lot is worth 5000 US dollars.
RTS Trading system in the quote-driven mode accepts only limit orders (with stated price). It also supports "Good till Cancelled" orders and Iceberg-orders.
Over-the-counter transactions executed over the telephone may also be reported.
The market is open from 10:30 to 18:00 Moscow time, same as all other RTS markets.
Settlement
Settlement of trades executed on the quote-driven mode can be performed on the following conditions: "Delivery versus payment", prepayment or pre-delivery. The parties have an ability to agree on the place, price, date of the delivery and the settlement currency.
The conditions of a trade are stated in the Purchase and Sale Agreement processed in the Electronic Agreement Center. Paper-based agreements are also allowed but signing agreements electronically is much easier and cheaper.
Market participants are required to send to RTS settlement reports for non-DVP transactions. Information about settling DVP transactions RTS obtains from the settlement system.
Risk management
Market participants control trading risks on their own. Each participant sets and monitors his own limits for each counterparty.
RTS Trading system uses bi-lateral limits set by the participants for "by-click" trade execution.
Trading participants
Access to the quote-driven segment of the Classic Market can be provided either in a Standard mode (that includes an option of submitting quotes and non-anonymous orders) or in a Reporting mode (only for negotiated trade reporting).
Traded securities
The quote-driven market of RTS Classic offers the widest range of securities of all Russian bourses.
Please look at the full list of securities traded quote-driven.
Fees
No exchange commission is charged for trade execution.
The fee for settling a transaction in "Depositary and Clearing Company" for DVP transactions is less than 25 US dollars. Transactions in the same security executed between two parties within one trading day in one direction are charged as one transaction.
Additional information
Quote-driven trading on RTS Classic Market is described in Trading Rules in the "Non-anonymous trading mode" chapter.
