Bank of Russia Rolls out First Trading System, Grants First License

The Bank of Russia has recently announced the launch of the first trading system, and has granted the first trading system license to Limited Liability Company Central Trading System, which allows the company to conduct organised trading in commodities.

According to the official press release, the roll-out of trading systems in the commodity market will make it easier for buyers and sellers to access modern sales technologies, help develop transparent pricing principles, identify key participants that are not priorities for large exchanges, as well as create a transparent database for the derivatives market section.

The central bank notes that there is an increasingly growing number of requests for trading in new commodity groups, including the small-scale wholesale segment of the market, first of all from small and medium-sized businesses. Trading systems can serve as an alternative venue offering simplified access to search for counterparties and make transactions for selling and buying commodities and finished goods.

As such, organized trading in commodities may now be carried out not only by exchanges focused on standardising exchange services for large market players, but also by organizations licensed as a trading system.

In order to avoid regulatory arbitrage and expand the range of participants, it is planned to simplify the rules for the operation of trading systems considering their scale and goods specifics. The introduction of proportionate regulation will lower barriers for entering the market and, accordingly, create the prerequisites for establishing new regional venues with logistics infrastructure and platform-based services for organised trading. In this regard, the Bank of Russia plans to use its regulatory sandbox.

"The development of trading systems can positively influence the financial market as well. In the world practice, these systems are active market participants along with exchanges. They may become the basis for launching new innovative products and ideas," said the bank.

Previously, Fazzaco reported that the Russian central bank was intensifying its anti-crypto campaign, with plans to outlaw all cryptocurrency investments in the country​, for the reason that the central bank is concerned over the risks to the country's financial stability with growing cryptocurrency transactions.