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Ministry of Justice

Russian Federation

On November 16, 2018 No. 52702

INSTRUCTION OF CENTRAL BANK OF THE RUSSIAN FEDERATION

of September 12, 2018 No. 4905-U

About requirements to activities of the central depositary regarding the organization of risk management, connected with implementation of activities of the central depositary, and also to rules of risk management, connected with implementation of activities of the central depositary

(as amended of the Instruction of the Central bank of the Russian Federation of 22.06.2020 No. 5483-U)

This Instruction according to Items 1 and 3 of article 32 of the Federal Law of December 7, 2011 No. 414-FZ "About the central depositary" (The Russian Federation Code, 2011, No. 50, Art. 7356; 2012, No. 31, Art. 4334; No. 53, Art. 7607; 2013, No. 27, Art. 3477; No. 30, Art. 4084; 2015, No. 27, Art. 4001; No. 29, Art. 4357; 2018, No. 17, the Art. 2429) (further - the Federal Law "About the Central Depositary") establishes requirements to activities of the central depositary regarding the organization of risk management, connected with implementation of activities of the central depositary (further - risks of the central depositary), and also to rules of risk management of the central depositary (further - rules of risk management).

Chapter 1. General provisions

1.1. The central depositary shall organize risk management of the central depositary in accordance with the legislation of the Russian Federation, including this Instruction and Chapters 1 and 3 of the Instruction of the Bank of Russia of April 15, 2015 No. 3624-U "About requirements to risk management system and the capital of credit institution and banking group", No. registered by the Ministry of Justice of the Russian Federation on May 26, 2015 37388, on December 28, 2015 No. 40325, on December 7, 2017 No. 49156, on September 5, 2018 No. 52084 (further - the Instruction of the Bank of Russia No. 3624-U), in the part which is not contradicting the requirements of this Instruction establishing general requirements to the organization of risk management of the central depositary and procedure for the organization by the central depositary of management of separate types of risks of the central depositary.

1.2. The central depositary shall organize the risk management of the central depositary corresponding to amount and nature of the transactions made by it.

1.3. Within the organization of risk management of the central depositary the central depositary shall organize identification, the analysis, assessment, monitoring and control, and also risk management of the central depositary, including the following types of risks:

risk of emergence of expenses (losses) of the central depositary as a result of failures and (or) mistakes in operation of program technical means of the central depositary and (or) in internal business processes of the central depositary, mistakes of employees of the central depositary and (or) as a result of the external events making negative impact on activities of the central depositary (operational risk of the central depositary);

risk of emergence of expenses (losses) of the central depositary as a result of loss of property (except for money) the central depositary and (or) its clients owing to bankruptcy or actions (failure to act) of person responsible for storage of this property and (or) implementation of accounting of the rights to the specified property, including blocking of property on the account (accounts) opened (open) for the central depositary at person, responsible for storage of this property and (or) implementation of accounting of the rights to the specified property, loss or misstatement of information on the property transferred to storage or which is subject to accounting (custodial risk of the central depositary);

risk of emergence of expenses (losses) of the central depositary owing to non-execution, untimely or incomplete execution by the debtor of financial liabilities before the central depositary in accordance with the terms of the agreement (credit risk of the central depositary);

risk of emergence of expenses (losses) of the central depositary as a result of change of the current (fair) value of financial instruments, and also the foreign exchange rates and (or) book prices on precious metals in which means of the central depositary (market risk of the central depositary) are invested;

risk of emergence of expenses (losses) of the central depositary owing to insufficiency of property at the disposal of the central depositary for satisfaction of requirements of his creditors for transfer of this property at the scheduled time (liquidity risk of the central depositary);

risk of emergence of expenses (losses) or suspension (termination) of rendering services of the central depositary as a result of ambiguity of interpretation of the rules of law made by the central depositary of legal mistakes (including, mistakes in case of creation of documents, by consideration of matters of argument in judicial authorities), imperfections of system of law (discrepancy of the legislation, lack of precepts of law on regulation of the single questions arising in activities of the central depositary), violations by clients (partners) of the central depositary of regulatory legal acts and (or) owing to finding of clients (partners) of the central depositary under jurisdiction of various states (legal risk of the central depositary).

1.4. The central depositary within the organization of risk management of the central depositary shall organize implementation of the actions provided by Chapters 2 and 3 of this Instruction, and procedures, requirements to which organization are provided by appendix 1 to the Instruction of the Bank of Russia No. 3624-U, concerning risks of the central depositary in the part which is not contradicting the requirements of this Instruction establishing general requirements to the organization of risk management of the central depositary and procedure for the organization by the central depositary of management of separate types of risks of the central depositary.

1.5. The central depositary within the organization of risk management of the central depositary in case of combination of the activities by it with other types of activity shall organize actions for decrease in influence of the risks connected with such combination on implementation of activities of the central depositary and take measures for prevention and settlement of conflicting interests.

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