MOSCOW EXCHANGE AND THE COMMUNITY
PROFESSIONAL COMMUNITY
The Exchange is working hard to build constructive dialogue with Russian and international investors, market participants, current and potential issuers, regulatory agencies and with the professional community, both by direct communication through advisory bodies and working groups, and also at investment conferences, forums and specialized training events. This work helps to attract new investors to the Exchange’s markets, expand the Exchange’s client base, increase liquidity on the financial markets and attract investment into the Russian economy.
Due to the pandemic, all communication with the professional community in 2021 was promptly transferred to an online format. Meetings of the Exchange Council, user committees and working groups, as well as public events and forums, were held via online conferences. In parallel, a number of new interactive projects were launched aimed at effective interaction with the professional community and private investors.
EXCHANGE COUNCIL
The Exchange actively interacts with market participants through advisory bodies. This enables to Exchange to receive feedback from customers on planned innovations in products and services, to effectively improve market infrastructure, and to draft proposals to improve the regulation of financial markets.
The main advisory body is the Exchange Council, which is tasked with elaborating strategic proposals for the development of the Russian financial market, and also represents the interests of market participants and the Exchange’s clients, to ensure that their needs are fully reflected when addressing issues related to the organization and development of financial market infrastructure. The Exchange Council includes management of major market participants, heads of self-regulatory organizations, management companies, investment banks and the Bank of Russia.
In 2021, four meetings of the Exchange Council were held to consider the following issues:
- On the development of the exchange-traded fund segment in Russia.
- On a programme to develop investment literacy among private investors.
- On the Code of Good Conduct.
- On trading in foreign securities and mirror contracts during public holidays.
- On the main areas of MOEX’s work with issuers.
- On the non-sponsored admission to trading of foreign funds.
- On labelling complex financial products for unqualified investors.
- On development of MOEX’s Standartised OTC Derivatives Market.
- On development of the foreign securities trading segment on the Exchange.
- On the progress of the Moscow Exchange Group’s customer satisfaction survey.
- On the impact of regulatory changes on the structure of the stock market.
- On the results of Moscow Exchange PJSC for certain periods.
- On the results of the Moscow Exchange Board of Directors’ work and identifying priorities for the Exchange Board of Directors’ future work.
USER COMMITTEES
The Exchange and NSD convene 20 user committees comprising groups of financial market participants and issuers.
The composition of most user committees is reviewed each calendar year. The members of the committees represent both professional market participants - banks and brokers - as well as issuers, non-financial companies and the regulator, the Bank of Russia.
For many years, the User Committees have been a means of communication between Moscow Exchange and the market. Members of the Committees formulate proposals to improve the regulatory framework and develop Moscow Exchange’s products and services. Issues considered at Committee meetings cover all aspects of the Exchange’s activities, from regulation of securities issuance and trading, information disclosure and corporate governance to technological solutions for organising on-exchange trading and clearing and settlements.
Since March, the newly established Credit Market Committee began its work with the main task of representing the interests of market participants who enter into credit contracts in order to fully and comprehensively address their needs.
The effective work of the User Committees in 2021 was maintained at a high level, despite the current epidemiological situation, thanks to the transfer of meetings to a remote format. A total of 100 meetings of the Committees were held during 2021, at which market participants discussed and provided recommendations on amendments to the Exchange rules, technology and tariffs.
EXPERT COUNCIL ON LISTING
The Expert Council on Listing has operated to improve the quality of securities analysis at admission and maintenance of a security in MOEX’s list. It is responsible for reviewing, analysing and making recommendations on the listing/ delisting of securities, moving companies between the listing levels, suspending trading in securities and other issues.
The Expert Council on Listing comprises 44 members, including appraisers, auditors, bankers, lawyers, analysts, investors and methodologists.
Meetings of the Expert Council are held in the format of working groups of subject matter experts of
In 2021, six meetings of the Expert Council on Listing were held and 14 issues were considered, including the development of recommendations on amendments to the Listing Rules with respect to approaches to the listing of shares and depositary receipts that are not traded on the List of Securities Admitted to Trading.
CORPORATE GOVERNANCE DEVELOPMENT IN RUSSIA
One of the key events in the field of corporate governance and investor relations is the annual report contest which has been held by the Exchange since 1997. The competition helps to increase transparency among public companies and effective information disclosure to investors and customers.
In 2021, 128 companies took part in the 24th annual reports contest, including seven debutants. The contest was run in partnership with Institutional Investor and Joint Stock Company magazines. The jury consisted of 17 experts, including representatives of major investment funds, professional associations, NGOs and regulatory bodies, leading financial analysts, corporate governance and communications specialists.
At the competition awards ceremony, the Exchange and Institutional Investor magazine awarded winners based on an independent survey of international investors’ views of the IR programs of Russian companies. The study involved more than 800 portfolio managers and analysts from 628 banks and funds around the world.
Moscow Exchange directors have consistently won prizes in prestigious business awards. In 2021, Oleg Vyugin, Chairman of Moscow Exchange’s Supervisory Board, was awarded the Best Independent Director in the Top 1000 Russian Managers, and Igor Marich, Managing Director for Sales and Business Development and member of Moscow Exchange’s Executive Board, was awarded the Best Commercial Director.
Oleg Vyugin was also awarded special category Contribution to the Development of the Independent Director Institute in the XVI National Director of the Year award.
Moscow Exchange was a partner of the XV International Forum of Corporate Secretaries, an annual platform for communication and exchange of experience among corporate governance professionals.
INTERACTION WITH THE INVESTMENT COMMUNITY
For many years, the Exchange has organized its own events and supported major professional financial markets conferences.
Since 2009, the Exchange has held the Moscow Exchange Forum in leading global financial
Moscow Exchange continued elaborating new remote formats to communicate with the professional community. As part of the MOEX Home Talks series of online meetings, Moscow Exchange representatives talk to company CEOs, discussing doing business in a changing environment, as well as development plans and new opportunities for the Russian economy and private investors. In 2021, eight meetings were held with executives of major issuers.
Состоялись 16 онлайн-церемоний по запуску новых продуктов и допуску новых ценных бумаг к торгам на Бирже, в том числе шесть церемоний по итогам IPO.
In addition, in 2021, Moscow Exchange held its annual Structured Products conference, was a partner in the business programme of the St Petersburg International Economic Forum (SPIEF), and supported events organized by self-regulatory
At the SPIEF 2021, eight cooperation and understanding agreements were signed with leading Russian and international companies to develop business ties, seek new cooperation opportunities and strengthen the financial market. The Group’s executives participated in 10 panel discussions of the forum, including one session organised with the support of Moscow Exchange.
INTERNATIONAL COOPERATION
The Exchange has for many years worked with international financial organizations to learn from global best practices and to exchange experience.
At the SPIEF 2021, a Memorandum of Understanding was signed with the Qatar Stock Exchange aimed at developing cooperation and strengthening partnerships and collaboration between exchanges in all respects. The memorandum foresees exchange of information on financial markets and products of Russia and Qatar, development of business relations between the exchanges and search of new business opportunities to link financial infrastructures of both countries.
In November, at the II International Financial and Banking Forum of CIS member states in Tashkent, Moscow Exchange signed a memorandum of cooperation with the Toshkent Republican Stock Exchange (Uzbekistan). The joint efforts of the exchanges will be aimed at developing exchange instruments, opening new markets and strengthening bilateral relations. According to the memorandum, the parties will consider establishing trading links between the exchanges for cross-listing of securities included in the quotation lists of trading platforms. It also provides for sharing of the Exchange’s experience in organising trades in foreign securities.
In November, a memorandum of cooperation was signed with the Uzbek Republican Commodity Exchange (UzRTSB). As part of the memorandum, a project was launched in December to trade cash-settled futures contracts on liquefied gas and cement, whose prices are determined on UzRTSB’s spot market, using technology of Moscow Exchange.
IMPROVING FINANCIAL LITERACY
A massive inflow of private investors to Moscow Exchange continued in 2021. The number of individuals who have brokerage accounts with the Exchange almost doubled in 2021 to around 17 million, or more than 10% of Russia’s population. Retail investors hold 27.7 million brokerage accounts. To improve the financial literacy of Russians and broaden knowledge of the principles of the exchange and traded instruments, Moscow Exchange holds specialised events, training seminars and competitions.
In 2021, Moscow Exchange rolled out the Investor’s Way, a training course developed with expert support from the Bank of Russia using the methodology of the International Organisation of Securities Commissions (IOSCO). It covers the key principles of effective investing - from understanding the risks of market operations to knowing investor rights - and explains in a simple format how on-exchange trading is organised. The Investor’s Way is the first course to be accredited by the Association for the Advancement of Financial Literacy (ARF), confirming its compliance with financial education best practice. The course is available online on the Moscow Exchange School website and is free of charge for anyone. In 2021, the course’s audience exceeded 1 million people.
The Moscow Exchange School’s training project, the Money Makes Money podcast, was listened more than 1 million in 2021. The podcast is top rated in the Finance and Investment and Business categories on all key podcast platforms. This is a new educational programme format that combines education with entertainment. The aim of the project is to increase financial literacy of individuals interested in investments. The second series of the project came out in 2021.
A total of 700,000 people have been trained as part of the Moscow Exchange School and more than 1,000 courses have been created.
The Exchange annually organizes competitions for private investors to demonstrate the opportunities and potential profitability of competent trading on MOEX. The ‘Best Private Investor’ contest has been held since 2003 and is the world’s largest exchange competition for traders. In 2021, a record number of investors, more than 26,600, participated in the competition, their total trade turnover amounted to 2.1 trillion rubles. Total prize money awarded exceeded 9.1 million rubles.
Since 2015, the Invest Trial competition for beginners has also been held, allowing participants to gain investment experience using demo mode (without risking their own funds) and get a real cash prize. In 2021, almost 17,000 investors took part in the competition, of whom more than 2,000 traded actively throughout the event.