MICEX Suspends 3 Brokers Over Repos

MICEX said Monday that it suspended three brokerages -- UTrade.ru, Antanta-Capital and Melon -- from trading on the exchange for failing to meet obligations on repo deals.

"Starting Dec. 15, the three brokers' access to trading on the stock exchange has been suspended due to complaints from other trading participants that these players have not fulfilled their obligations on repo transactions," MICEX chief executive Alexei Rybnikov said through his press secretary.

"The reinstatement of their access to trading is possible after receipt by the exchange of confirmation that all parties have satisfied their obligations," he said.

Repurchase agreements are used to secure short-term funding by selling securities with an obligation to buy them back, generally the next day.

Monthly claims on unpaid obligations by MICEX trading participants
In millions of rubles
Total non-payments29,1135,688166
Share of non-payments by
suspended brokers
Source: MICEX

According to information on the exchange's web site, UTrade had 2.81 billion rubles ($102 million) in new, unmet obligations in October, while Melon and Antanta-Capital owed 351 million rubles and 113 million rubles, respectively. The companies accounted for 58 percent of all unpaid obligations that month.

The amount of unpaid obligations reported by MICEX has fallen significantly since September, when traders had as much as 29 billion rubles ($1.1 billion) in unmet obligations, causing concern among investors and a plunge in companies' market values.

Calls to UTrade and Antanta-Capital went unanswered Monday. Melon's web site did not list a phone number for the brokerage, and an after-hours call to the company's asset management division in Orenburg was not answered.

Capitalist, a broker that works on the repo market, said in a statement dated Sept. 30 that Antanta-Capital failed to fulfill obligations to Capitalist on repo transactions worth 317 million rubles. The company said it has repeatedly tried to reach an agreement with Antanta-Capital's management on repayment.

One of MICEX's charter documents allows for disciplinary action against players who show "unprincipled behavior" or break the exchange's operating rules, including trading suspensions.