Moscow Exchange and the 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 2020 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.
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 March 2020, the Moscow Exchange Supervisory Board approved a new composition of the Exchange Council comprised 26 members. Andrey Zvyozdochkin, CEO of ATON Investment Company, was re-elected Chairman of the Exchange Council.
In 2020, seven meetings of the Exchange Council were held to consider the following issues:
- situation with the Light Sweet Crude Oil futures contract;
- management of short-term surplus liquidity;
- results of Moscow Exchange’s operations for certain periods;
- Regulations on Moscow Exchange’s operations on non-business days;
- Concept for updating the Code of Conduct for Trading and Clearing Members of Moscow Exchange Group companies;
- work of the Expert Council on Listing;
- results of the Exchange Council’s work and identifying priorities for the Exchange Council’s future work;
- conducting a survey on the level of satisfaction of Moscow Exchange clients.
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.
The effective work of the User Committees in 2020 was maintained at a high level, despite the current epidemiological situation, thanks to the transfer of meetings to a remote format. A total of 9 meetings of the Share Issuers Committee, Bond issuers Committee and Primary Market Committee were held during 2020, at which market participants discussed topical issues such as the Bank of Russia’s draft recommendations on disclosure of non-financial information under the Responsible Investment Concept (ESG), bond listing development and optimisation, parallel IPOs with listing on Moscow Exchange and assessment of pandemic impact on issuers.
It has become standard Moscow Exchange corporate governance practice for changes in terms of exchange rules, technologies and tariffs to be subject to mandatory pre-approval at meetings of the relevant User Committees.
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 admitted to trading on the Exchange, moving companies between the listing levels, including/excluding securities in/out of the High Investment Risk Companies Sector, suspending/resuming trading in securities and other issues.
At the end of 2020, a new Expert Council on Listing of 44 members was formed, including appraisers, auditors, bankers, lawyers, analysts, investors and methodologists. The number of expert appraisers was increased to 6 to strengthen the expertise on appraiser reports for the listing of mortgage participation certificates, mutual funds and bonds.
Meetings of the Expert Council are held in the format of working groups of subject matter experts of
In 2020, eight meetings of the Expert Council on Listing were held and 19 issues were considered, including the development of recommendations on amendments to the Listing Rules.
CORPORATE GOVERNANCE DEVELOPMENT IN RUSSIA
One of the key events in the field of corporate governance and investor relations is the annual report contest organized by the Exchange and RCB media group. The competition helps to increase transparency among public companies and effective information disclosure to investors and customers.
In 2020, 111 companies took part in the 23rd annual reports contest, including 10 debutants. The awards ceremony was held online.
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 385 portfolio managers and analysts from 240 banks and funds around the world.
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
In 2020, Moscow Exchange launched 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 and key experts, discussing doing business in a changing environment, as well as development plans and new opportunities for the Russian economy and private investors. In 2020, 11 meetings were held with executives of major issuers, banks, brokerage and management companies.
In addition, in 2020, Moscow Exchange held its annual Structured Products conference and supported events organized by self-regulatory
IMPROVING FINANCIAL LITERACY
2020 was the year of the private investor - almost 5 million individuals opened brokerage accounts with Moscow Exchange, which is more than in all previous years. To improve the financial literacy of the population and broaden knowledge of the principles of the exchange and traded instruments, Moscow Exchange holds specialised events, training seminars and competitions.
In 2020, for the first time, an Investment Marathon was held for retail investors, both beginners and those who already have experience of trading on stock exchanges. Leading financial experts, stock exchange representatives, regulators, banks and brokers, and investor practitioners shared their experiences in the world of investment online and answered questions from listeners.
As part of the International Investor Week organised by the International Organisation of Securities Commissions (IOSCO), Moscow Exchange opened the trading day with a ceremony dedicated to financial literacy. The Ring the Bell for Financial Literacy ceremony was initiated by the World Federation of Exchanges (WFE).
In 2020, Moscow Exchange launched a number of new online projects for a wide range of retail investors:
- “Investing Without Panic” is a series of online meetings with financial market experts on the most relevant topics for retail investors. The events are organised in two streams - for novice investors and for experienced traders.
- The “Money makes money” podcast for retail investors 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 main topics of the broadcasts include the basics of investing, defining a risk profile, the structure of the securities market, key stock market instruments and how to work with them.
- Telegram channels for anyone interested in investing.
- The official MOEX-Moscow Exchange channel is dedicated to the main news, market snapshots and relevant data on developments in the stock market and investment industry.
- The channel of the Moscow Exchange School educational project is intended for novice investors and anyone who wants to understand the nuances of exchange trading, strategies and the specifics of various instruments.
In 2020, about 300 training webinars were held on the Moscow Exchange School online platform which works to improve the financial literacy of the population. The webinars allowed retail investors to gain knowledge and skills in managing their personal finances. More than 80,000 people participated in these events.
The Exchange annually organizes competitions for private investors to demonstrate the opportunities and potential profitability of trading on MOEX. The ‘Best Private Investor’ contest has been held since 2003 and is the world’s largest exchange competition for traders. In 2020, a record 16,600 investors participated in the competition, their total trade turnover amounted to 1.7 trillion rubles. Total prize money awarded was 8.7 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 2020, over 12,000 investors took part in the competition, and more than 700 were awarded prizes. Total prize money awarded was 8 million rubles.
Moscow Exchange is working with the Bank of Russia to improve financial literacy. In 2020, Exchange employees participated in the Financial Literacy Days project in Russia’s regions, and were active members of the Expert Council on Financial Literacy at the Bank of Russia and in working groups of the Financial Literacy Development Association.
In 2020, the audience that participates in various events to improve financial literacy has grown significantly. In addition to the official Exchange telegram channel, Moscow Exchange specialists participated in some TV projects on the Kultura and Rossiya 24 channels.
COOPERATION WITH UNIVERSITIES
As part of its initiatives to increase financial literacy and partner with Russia’s leading universities, Moscow Exchange has established a Moscow Exchange Scholarship for students and a Distinguished Professorship at the New Economic School (NES), to provide an opportunity for talented and hardworking students to concentrate on their education and fulfill their academic potential. Four students currently conducting research at NES’s Master Degree Programs have been awarded Moscow Exchange Scholarships and a Distinguished Professorship has been awarded to Anna Obizhaeva, Professor of NES.
The annual Governor’s Cup of the Novosibirsk Region on the Exchange Financial Market was held for students of Russian universities. The tournament gave 234 students from 24 universities in 15 Russia’s cities the opportunity to familiarize themselves with exchange tools, try out trading strategies, practice building an investment portfolio and gain experience in the exchange markets. The tournament was held in two stages - the first stage as part of the Invest Trial 2020 competition and the second stage as part of the annual Best Private Investor competition. The winners were determined on the basis of the maximum total income from operations on the Equity & Bond, FX and Derivatives Markets. All winners were awarded letters of appreciation from the Governor of the Novosibirsk Region and the Ministry of Education of the Novosibirsk Region, as well as prizes from Moscow Exchange and professional participants.
STOCK EXCHANGE HISTORY
During 2020, ongoing work continued to further explore the history of our country’s stock exchanges and financial market. Before the lockdown began, employees of banks and financial companies (Sberbank, Alfa Bank, Otkritie, etc.) visited the historical exhibition of the Stock Exchange Museum. Since March 2020, excursions to the museum have been impossible due to the pandemic; however, information about interesting facts and events on the history of Russia’s financial market began to be posted on the official MOEX-Moscow Exchange telegram channel.
Research work continued unabated, with the Exchange History Museum actively collaborating with the Goznak Money Museum (St. Petersburg), the Scientific Council for Economic History of the Russian Academy of Sciences, the Institute of Russian History of the Russian Academy of Sciences, and the Centre for Economic History of Lomonosov Moscow State University. Articles on the history of the Russian Empire’s public debt, the financial consequences of the Treaty of Brest-Litovsk, the first Soviet government bonds and the monetary reform of the 1920s were prepared and published.