The Moscow Exchange (MOEX) is Russia’s largest and most diverse financial market, providing a wide range of investment and trading opportunities for both Russian and international investors and traders. As Russia’s main platform for stocks, bonds, derivatives, currencies, money markets, and commodities trading, the Moscow Exchange plays a vital role in the country’s economy and financial system.

Introduction to the Moscow Exchange

The Moscow Exchange was formed in 2011 from the merger of Russia’s two main domestic exchanges – the Moscow Interbank Currency Exchange (MICEX) and the Russian Trading System (RTS). This merger consolidated trading activity onto one platform and created a single entity to provide centralized clearing and settlement services.

Headquartered in Moscow, the Moscow Exchange now offers trading in equities, bonds, currencies, investment funds, derivatives, commodities, money markets, repo transactions, and more. It has become the main platform in Russia for raising capital and transferring risk, with an important role in improving corporate governance and transparency for Russian companies.

Some key facts and figures about the Moscow Exchange:

  • Over 200 trading instruments across various asset classes
  • Over 850 securities listed with a total market cap over $650 billion
  • Average daily trading volume over $20 billion
  • Membership of over 490 professional participants
  • Remote membership available for international investors and traders
  • Trading hours from 7:00am to 11:50pm Moscow time

As Russia’s only centralized clearing organization, the Moscow Exchange Group also provides clearing, settlement, collateral management, and national payment depository services. Its trading and clearing infrastructure complies with international standards and best practices.

The Moscow Exchange is Russia’s most liquid and efficient venue for trading, with high tech software optimizing order execution and providing fair market access. It uses the latest technology including a high-performance trading engine and real-time clearing. The exchange aims to provide the advanced trading tools and market data needed by professional traders and investors.

Key Assets Traded on the Moscow Exchange

The Moscow Exchange provides trading across a diverse range of financial instruments, giving investors exposure both to the Russian financial markets as well as international assets. Some of the key assets traded on the exchange include:

Equities

The Moscow Exchange runs Russia’s main stock market, featuring over 850 securities with a total market capitalization over $650 billion. Stocks traded include major Russian companies like Gazprom, Sberbank, Lukoil, Rosneft, and others. Trading hours run from 9:30am to 7pm Moscow time. The MOEX Russia Index is the main ruble-denominated benchmark tracking the largest and most liquid Russian stocks.

International investors can access Russian equities through sponsored access, electronic access via a local brokerage, or by using GDRs and ADRs traded in London and New York. The Moscow Exchange also offers an index of the 50 most liquid Russian depositary receipts.

Bonds and Money Markets

A wide range of fixed income securities are traded on the Moscow Exchange, including Russian government bonds (OFZ), municipal and sub-federal bonds, and corporate bonds from major Russian companies. Trading runs from 10:00am to 6:45pm Moscow time.

The Moscow Exchange money market allows banks and corporations to trade short-term deposits and loans, providing vital liquidity adjustment. Instruments include repos, currency swaps, and deposits.

Derivatives

The Moscow Exchange trades futures and options on Russian stocks, stock indices, interest rates, currencies, and commodities. It offers trading in single stock, index, currency, and interest rate futures and options providing investors tools for risk management.

Popular derivatives contracts include futures on the RTS Index, the ruble-denominated MOEX Russia Index, and USD/RUB currency futures. Commodity derivatives feature contracts on gold, silver, oil, wheat, and more.

FX and Precious Metals

The Moscow Exchange has Russia’s deepest spot and swap currency markets, trading major currency pairs and crosses involving the Russian ruble, US dollar, euro, British pound, Swiss franc, and others.

Precious metals trading features spot, swap, and derivatives contracts on gold and silver. Investors can also purchase and sell physical gold bullion through the exchange’s Precious Metals Market.

Moscow Exchange Indices

The Moscow Exchange maintains a range of market indices investors can use to analyze market trends and benchmark portfolio performance. Major indices include:

  • MOEX Russia Index ($IMOEX) – Blue chip ruble-denominated index of 50 largest and most liquid Russian stocks
  • RTS Index (RTSI) – Russia’s benchmark dollar-denominated index tracking 50 leading stocks
  • MOEX 10 – Index of 10 most highly capitalized and liquid Russian shares
  • MOEX B&FN – Index of government and corporate bonds and securitized products
  • MOEX CRUD – Index tracking oil companies
  • And dozens more sector, corporate bond, and other specialized indices

These indices provide benchmarks for funds tracking different segments of the Russian market and underlie many of the exchange’s derivatives contracts.

Trading Access and Membership

The Moscow Exchange aims to provide fair and open access to its markets for both Russian and international participants. Trading access is available through several categories of membership:

Direct Membership

Over 490 Russian and international financial firms hold direct trading membership on the Moscow Exchange, giving them direct market access through the exchange’s trading and clearing systems. Direct members can trade on their own behalf and on behalf of clients.

Over 1960 international investors have gained access to the Moscow Exchange equity and derivatives markets through sponsored trading programs offered by local brokers. Sponsored access allows international firms direct order entry capability under the umbrella of a sponsoring Russian broker.

Electronic Access via Local Broker

Foreign investors can route orders electronically to the Moscow Exchange via a local Russian brokerage firm and its trading terminals. This allows international investors to access MOEX markets electronically using the broker’s sponsored trading identification codes.

Remote Membership

Available to international members unable to maintain a physical presence in Russia. Remote members use exchange-approved application programming interfaces (APIs) to enter orders and access market data electronically.

The Moscow Exchange aims to expand remote participation to increase foreign investment in Russian markets.

Fees and Charges

The Moscow Exchange charges fees on a per-contract, per-transaction, and monthly membership basis. Rates vary based on factors like monthly volume, liquidity provision incentives, and membership status.

Some examples of Moscow Exchange fees:

  • Equities: RUB 0.01344 per order
  • Bonds: 0.00137% of bond volume per trade
  • Derivatives: RUB 1.94 – RUB 3.94 per contract
  • FX: 0.0015% – 0.0030% per transaction value
  • Precious metals: 0.08% per transaction
  • Money market: RUB 200 per transaction
  • Membership: RUB 40,000 – 225,000 monthly

The Moscow Exchange offers discounts, incentives, and rewards programs to encourage liquidity provision and active trading. It has also implemented market making programs across all instrument types to improve liquidity.

Technology and Infrastructure

The Moscow Exchange operates a technologically advanced trading platform benchmarked against international best practices. Core technology includes:

  • ASTS Trading System – The exchange’s proprietary trading system built on the NASDAQ OMX trading platform. It delivers high throughput with peak capacity over 2 million messages per second.
  • ASTS Clearing System – Provides centralized clearing, settlement, collateral management, and clearinghouse functions.
  • Unified Collateral Pool – Allows collateral lodgement across multiple markets to maximize efficiencies.
  • MOEX Trade repository – Centralized storage of OTC derivatives trades used for monitoring systemic risks.
  • 100 Gbit/s network between Moscow and London – Delivers ultra-low latency connectivity and access to global liquidity pools.
  • Primary and Secondary Data Centers – Provide fully redundant trading infrastructure across two active data centers.

This advanced, multi-market technology ensures high reliability, low latency, efficient clearing mechanisms, and robust risk controls across all Moscow Exchange markets.

Listing Requirements

For a company to list its shares on the Moscow Exchange, it must meet certain transparency and disclosure requirements. Key listing rules include:

  • Minimum free float of 10% for new listings, with at least 500 shareholders for a secondary listing
  • Financial statements prepared under International Financial Reporting Standards (IFRS)
  • Corporate governance frameworks in line with Bank of Russia and MOEX listing rules
  • Increased reporting and disclosure standards for issuers
  • Listing applications approved by both the issuer and the exchange

The Moscow Exchange’s strict listing requirements improve transparency and protections for minority shareholder rights. Its rules also mandate information disclosure, insider trading restrictions, and other safeguards for investors.

Over 260 companies have listed on the Moscow Exchange since its formation in 2011, attracting over $160 billion in capital. While historically resource and energy companies dominate listings, the exchange hopes to attract issuers from new economy sectors like technology, telecoms, and e-commerce.

Trading Performance and Volume Statistics

The Moscow Exchange has demonstrated strong and consistent trading volumes across its key markets:

  • Over RUB 1 quadrillion in total trading turnover in 2021
  • Average daily turnover exceeds RUB 4.5 trillion
  • Over 2 billion shares traded per month across 163 Tickers
  • Monthly derivatives contracts traded topped 5.5 million
  • Average daily FX turnover of $23 billion in spot and derivatives
  • Monthly average of 2.5 million individual investment accounts
  • Bond issuance averaged RUB 315 billion per month in 2021

The exchange hit several trading volume records in 2021, including 2 million derivatives contracts traded on October 22 and daily FX swap records over $37 billion.

Overall trading velocity hit over 1 million transactions per hour during peak sessions demonstrating the exchange’s capacity and technology strengths.

Role in the Russian Financial System

As Russia’s main venue for trading securities, derivatives, FX, money markets, commodities, and commodities, the Moscow Exchange plays a vital role in the nation’s financial system and economy. Key functions include:

  • Providing capital raising access for Russian corporations and municipalities
  • Offering hedging and risk transfer mechanisms through its derivatives market
  • Allowing the Central Bank to conduct monetary policy operations
  • Enabling the free flow of currency and global price discovery
  • Allocating capital efficiently to productive sectors of the real economy
  • Improving corporate governance and transparency of listed companies
  • Providing Russia’s main stock market benchmarks and indices
  • Supplying investment and trading mechanisms for both domestic and foreign investors

The Moscow Exchange has become systemically important to Russia, with over half of Russian banking assets concentrated among Moscow Exchange members. It provides the core financial market infrastructure supporting Russia’s growth and economic diversification objectives.

Conclusion

The Moscow Exchange has become the centerpiece of Russia’s efforts to transform and modernize its capital markets. Its advanced trading platforms, clearing systems, and robust market data capabilities provide domestic and international investors with transparent and efficient access to Russia’s financial system.

With broad asset class coverage, competitive fees, remote participation availability, and globally benchmarked technology, the Moscow Exchange offers a world-class environment for trading in Russian securities, derivatives, currencies, and commodities.

As the nation continues its economic evolution, the Moscow Exchange will remain the gateway to investing in Russia as it provides new capital raising, risk hedging, and market data services that are indispensable to the country’s issuers, traders, investors, and financial institutions.