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. Last Updated: 07/27/2016

Brokerages Will Go Electronic

Russia's leading brokerage firms, seeking to facilitate trading in the country's chaotic equities market, plan to set up a unified electronic stock quotation and settlement system by the middle of next month, brokers said Friday.


Viktor Agroskin, vice-president in charge of development at the Rinaco-Plus brokerage house, said in an interview that a new association of brokerages will within three weeks set up both an electronic information system, enabling them to obtain share quotations on their computer screens, and a settlement center where they can register share purchases.


"We're creating a unified trading space, open to everyone," Agoskin said.


The new system is being developed by the Professional Dealers' Association, founded last month by Russia's fifteen leading brokerage houses, including Rinaco-Plus, Russian Brokerage House, Troika-Dialogue and Grant, said Agoskin. It is part of a larger project funded by U.S. AID and advised by consultants KPMG Peat Marwick to create a nationwide clearing and quotation system.


Today, dealers on Russia's disorganized stock market have to physically visit other brokerage houses to locate liquid shares of oil and communications companies. Moreover, without a settlement center, brokers can only register share purchase at the company itself, which often requires trips to far-flung regions and can turn simple stock purchases into sagas.


But as soon as mid-September, when the new system is scheduled to be up and running, brokers' activities would be pretty much narrowed to scanning their computer screens and making deals over their telephones.


Within two weeks, brokers will select one of two computer programs to support the electronic quotation system. A settlement center, designed by the Russian firm DKK, is also scheduled to come into operation by mid-September, according to Mikhail Dyomin, an expert with the Russian Brokerage House.


"When the system is working, our brokers won't have to fly Siberia to re-register shares any more," Dyomin said.


The new electronic trading system would be quotation-driven, as opposed to order-driven, meaning that brokers will not be able to strike actual deals using the computer network. "A broker will have information on all quotations, but the words 'deal done' will be said over the phone," Dyomin said.


He said that a quotation-driven system is better suited to the Russian over-the-counter stock market, since it allows brokers to negotiate special terms for each particular deal.