Risk management strategy

All principal risk takers among the companies of the Group have developed a risk and capital management strategy. The principles and processes of the strategy seek to build, use and develop a comprehensive system of capital and risk management to ensure business continuity both in normal and stressed economic conditions, to enhance transparency of the risk and capital management processes, as well as to identify and assess significant risks in a timely manner, support capital planning and take due account of risks in the decision-making process.

With a view to maintaining efficiency of the regular risk management processes:

  • the following committees operate: the Risk Committee of the NCC Supervisory Board, Risk Management Committee of Moscow Exchange, Risk Management Committees of NCC Management board and Moscow Exchange and Risk Committee of NSD Executive Board;
  • a system of distribution of powers and responsibilities is in place to implement key risk management principles;
  • risks are regularly identified and mitigation measures;
  • financial resilience recovery plans and plans for engagement of additional resources have been developed.

Moscow Exchange has also established a separate market operator’s risk management subsystem that enables it to identify and assess risks in a timely manner and to develop mitigation measures.

This system incorporates continuous monitoring of emergencies and assessment of their potential impact on the technical processes of the Exchange’s markets, as well as updating the integrated operational and financial risk management system in line with adopted decisions and procedures. The Exchange is constantly developing and improving its risk management system to reduce the vulnerability of business processes and their recovery time, to improve system redundancy based on spacing and duplication of resources, and to improve the reliability of communication systems between traders, the Exchange and depository and settlement organizations.

In addition, the Exchange has also set up a separate structural unit responsible for managing its risks as a market operator. This unit aims to identify and assess risks in a timely manner and to develop mitigation measures. The Exchange has developed and approved the Regulations on Managing the Risks of a Market Operator.