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. Last Updated: 07/27/2016

RTS Launches Real-Time Internet Channel for Stocks

With a full-fledged Internet stock trading system just months away, the Russian Trading System has granted its members and their clients real-time Internet access to the exchange's information systems, RTS public-relations director Olga Belobrovtseva said Wednesday.

Before the launch of the new Internet channel, RTS members and their clients could trade, report and access lists of quotes, trades and securities - but only through private telecommunications channels like leased lines.

The move allows smaller brokers and investors and those in the regions to gain direct access without the expense of leasing a line, a service that Belobrovtseva said smaller players often cannot afford. The new channel comes with a $500 registration charge and a monthly fee of $400.

The first order came from Moscow investment bank Dialog-Optim on behalf of a client in Novosibirsk, Western Siberia, Belobrovtseva said.

For now, the system bars users from active trading and reporting. But the exchange is building a system of Internet links between RTS, members and clients and their banks that should allow remote trading via Internet by the beginning of summer, Belobrovtseva said.

RTS has hired domestic encryption specialist Penza Electrotechnical Institute to work out new security measures for its Internet system, one of which is a system of "electronic keys" to identify users and defend trades from hacker attacks.

Software developers are building the trading system so that it can be adapted for each brokerage's system, many of which already have plans to sell stock over the Internet.

"To make one system for everyone is cheaper," Belobrovtseva said. "We believe the number of companies who will [use the online broking system] in Russia is very small," Belobrovtseva said. "It is not cheap. Whether we will sell this system or [brokers] will is not important."

Brokerages were cautiously optimistic about the plan.

Konstantin Melnikov of NIKoil's sales department said the investment bank was aware of plans to begin Internet trading this summer, but said the details remained foggy and an early summer start date seemed too optimistic.

"Of course, we want to participate, though," Melnikov said.

Clients appear to be interested in the prospects for Internet trading, said Christian Sullivan, head of trading at United Financial Group. But he advisedintensive credit checks on all users, monitoring by stock watchdog NAUFOR, hefty deposits and a ban on margins to prevent bad-faith trading.

"Suppose there is a client that UFG won't deal with, or Brunswick or Troika, but one of the smaller Russian brokers will. Say they give out a ton of keys to all their friends," Sullivan said. Those brokerages "had better be prepared to take responsibility for their clients' $20 million losses," he said.