The Moscow Exchange was formed several years ago (in 2011) on the basis of the MICEX (Moscow Interbank Currency Exchange) and the RTS (Russian Trading System) that were formed in the nineties of the twentieth century.
The created holding also includes CJSC National Settlement Depository, which is a non-bank credit organization, and CJSC JSCB National Clearing Center.
The shareholders of the Moscow Exchange holding include, among others, such major banks as:
- CBR (more than thirteen percent of shares).
- Sberbank (about ten percent).
- Vnesheconombank (about eight and a half percent of shares).
- EBRD (almost six percent).
The chairman of the board is A. Afanasyev, and the chairman of the board of observers is A. Kudrin.
The Moscow Exchange relatively quickly gained popularity, entered the twenty largest stock markets in the world and the ten leading stock exchanges in the world for derivative financial instruments.
Moscow Exchange, foreign exchange market: trading
Various operations are performed on the exchange:
With securities. The stock market here consists of the equity market (stocks, shares of investment funds, depositary receipts, mortgage certificates, bonds on the principle of T + 2) and the debt capital market (bonds on the principle of T + 0).
With precious metals. Calculations occur at different times, from one day to six months. Trading is conducted with gold and silver. Future deals can be made with the rest of the precious metals .
With production financial instruments and large-scale goods through the derivatives market.
With currency. In addition to the Russian ruble, the Moscow Exchange has in its arsenal the dollar, euro, Belarusian ruble, Ukrainian hryvnia, Chinese yuan and Kazakh tenge.
Trading on the Moscow Exchange takes place on weekdays on a schedule. Different markets have different trading times. For the foreign exchange market, working hours are from ten to half past five; in off-system transactions mode - up to twenty-three hours and fifty minutes.
Private investors in the foreign exchange market
The Moscow Exchange currency market used to be available only to banks, but for some time now, brokerage companies have also received permission to conduct trading. And to obtain speculative or investment income, the services of the Moscow Exchange can be used by private investors. However, they will not be able to trade directly, so they go here through brokerage firms that are allowed to bid.
On the official website of the Moscow Exchange you can find a list of bidders. To date, there are about seven hundred such organizations. The vast majority of them are banks and only a small part, namely five percent, account for brokerage companies. The Moscow Currency Exchange is a platform mainly organized for trading with foreign currency at the Unified Trading Session (shortly UTS).
Through brokerage companies, private investors can trade in currency, securities, precious metals, options and futures.
But, as a rule, most private investors trade in the foreign exchange market.
Trading volume in the foreign exchange market
What is the trading volume of the Moscow Exchange currency market? In 2012, it amounted to one hundred and seventeen trillion rubles.
In 2013, the Moscow Exchange currency market grew by thirty-three percent and amounted to one hundred and fifty-six trillion rubles (compared with the previous year). Having a low volatility of currencies, trading on the spot market fell by almost seven percent, and swap transactions, on the contrary, increased significantly - by seventy-eight with a small percentage. The factors that contributed to the growth of Russian and foreign participants were the emergence of new exchange products and increased convenience in the market.
In 2014, growth was forty-six and a half percent (compared with 2013). When the Central Bank let the ruble go free, only in December the Moscow Currency Exchange registered trades in the amount of 25.6 trillion rubles, of which ten trillion were cash transactions, and the rest were swap transactions. This is almost ten trillion rubles more than in December of the previous year.
One of the representatives of the exchange explained such a large increase in investments and interest rates by the fact that market participants kept a large amount of currency in rubles. Therefore, interest income was so great. The rate level also helped to increase income during the currency crisis.
In general, the percentage income is about half of all Moscow Exchange revenue. For example, on the London Stock Exchange, interest income was around five percent, and on the Warsaw Stock Exchange in 2014 it was zero.
Forex and Moscow Exchange: differences
The foreign exchange market of the Moscow Exchange and Forex have cardinal differences. Let's consider some of them.
Ninety-nine percent of Forex cuisines do not display applications for the interbank market. They remain inside a company, often registered in the offshore zone, sometimes only positioning itself as a Forex, in fact, not being one. It is with these companies that a comparison is made below.
1. Regulation
The exchange market of the Moscow Exchange is regulated by acts adopted by the Central Bank of Russia, internal rules and regulations. Forex companies are often located in offshore zones, some of them are essentially fake, not included in the register at all, although they position themselves differently.
2. Position of applications
On the Moscow Exchange, applications filed through a broker enter the market and become visible to everyone involved in the market. An application submitted through a Forex broker will remain inside the company’s system and will not be visible on the market.
3. Guaranteed transactions
It’s not enough just to make a deal, it is important to get the money in the end. Settlements on the Moscow Exchange are carried out by CJSC National Clearing Center, while Forex brokers often provoke conflicts in order to refuse to make a profit.
4. The possibility and lack of influence of the broker on the currency price
The exchange rate on the Moscow Exchange is established jointly with the participation of all bidders. In Forex, you have to bargain with the company itself, which can easily delay the quote, or, for example, increase the spread between ask and bid. The broker himself cannot influence this here.
5. Who is the counterparty
It has another advantage of the Moscow Exchange. The dollar, ruble, euro or other currency is used in trading with the entire market, and in Forex against the broker. Therefore, a Forex broker is directly interested in the loss of his client.
6. Cash currency
The purchased currency can be stored in a bank account. There is no such possibility in trading with a Forex broker.