All about depositories and depository activities. What kind of place is it for storing securities?

Why do you need a depository?

Dealers, brokers, and management companies deal with securities transactions, and the depository stores and records them. Its employees are responsible for the legal transfer of rights from one asset owner to another.

Anyone who plans to purchase shares, bonds or other securities opens DEPO-type accounts at the depository. They are used to make records of the enrollment and write-off of these material assets.

The main feature of the depository is that it has nothing to do directly with the transaction. Purchase and sale, donation, and redemption are carried out by non-depository employees. It provides only intermediary services for storage and transactions.

Safety

Depository activities in Russia are regulated by two dozen legal acts. Each depository must have a reserve of its own funds of at least 20 million rubles and a valid license. If it is suddenly canceled (revoked), then depositors can move to another depository by transferring their assets or move their securities to a personal account in the shareholder register. When working with a depository, the investor does not have any financial risks.

Withdrawal of securities from the depository

There is no specific storage period - the depositor himself decides how long to keep his assets there. If there is no debt to the broker and depository, then you can withdraw assets at any time. To do this, you just need to submit a withdrawal order.

Types of depository services

The Sberbank Depository performs the following functions:

• registration of new accounts for accounting of the Central Bank in national and foreign currencies;
• accounting and physical storage of emission and non-emission securities, such as bills, bills of lading, checks, shares, bonds and others;
• accounting and transfer of ownership rights to the securities after the conclusion of transactions between the parties;
• conducting transactions on transactions with the Central Bank using Sberbank correspondent accounts in international clearing centers of banks in Europe and the USA;
• registration of collateral transactions, imposition and removal of encumbrances;
• transfer and receipt of data between depositories of the world in the process of conducting operations;
• drawing up statements of depo accounts for their subsequent transfer to account holders;
• crediting profits from working with the Central Bank, interest, dividends;
• redemption of coupons and securities themselves;
• organizing work with issuers of securities, participating in shareholder meetings on the basis of a formalized power of attorney, conducting procedures for splitting, consolidating or converting securities.

In terms of its functions, the Sberbank depository assumes the mission of a custodial bank for international participants in depository transactions and storage of ADR/GDR depositary receipts.

What is this

The depositary is a professional market participant. Its fundamental task is to keep records of securities that are bought and sold on exchange trading. The depository organization does not have the right to own client assets and any operations are carried out on behalf of the client - the depositor. Electronic document management and electronic signatures are used. All purchase and sale transactions are completed by changing electronic data about the owner. The full range of functions of a depository depends on its type.

As of 2022, there are more than 450 depositories in the Russian Federation

Advantages of the Sberbank depository

The Sberbank Depository began providing services in 1997. As of 2022, there are 50 share programs under management here, as well as 29 issuers of the underlying asset of the Russian Federation. There are over 1.7 million securities accounts under service. For data transfer and remote transactions, the bank uses secure SWIFT or Online Sberbank channels.

The Sberbank Depository system complies with Russian Federation standards. It has proven a high degree of security and fault tolerance. Its activities are controlled directly by the Bank of Russia. Included in the TOP of global custodian banks in the Russian Federation and the world. For achievements in the field of depository services, she was awarded the Global Custodian Cup 5 times in a row from 2014 to 2022.

Remote control

The depositary works directly with clients when visiting offices and through remote control. The second method is preferable when it is inconvenient to come for operations in person every time. Clients use the SWIFT Connectivity system, which allows them to work simultaneously with several deposit accounts. Data transfer occurs according to the ISO020022 standard, which is approved throughout the world.

All document flow also occurs in electronic form, based on the EDI system. All electronic versions of stored documents correspond to the originals and allow transactions to be carried out online. Clients can create an electronic signature, which is stored on a flash drive or in special storage.

Russian issuers can order the Sberbank-Business service from the bank and conduct transactions with domestic securities on securities accounts through the Client-Bank system. You can access it in three ways:

1. From the official website of Sberbank using your login and password.
2. Through a personal computer or laptop on which special software from Sberbank is installed.
3. From a mobile device after installing the application.

Sberbank's online systems for managing securities accounts have repeatedly won domestic and international awards for the implementation of advanced technologies. There are programs that are suitable only for working with Russian securities or only with foreign ones. But for clients who conduct transactions with the Central Bank in different currencies, universal software is provided.

Data Security

The Sberbank Depository ranks first among similar organizations in the Russian depositary services market. Data confidentiality is at the highest level. Data on transactions with the Central Bank and concluded transactions are not available to anyone except the account owner.

Encryption protocols meet the latest advances in this area. The largest companies in Russia trust Sberbank PJSC to handle their securities. These include Magnit, MTS, Rostelecom, Taftneft, Megafon, Lukoil, Gazprom Neft.

Versatility

Residents and non-residents of the Russian Federation, both individuals and legal entities, are serviced by the Sberbank Depository. The system works with securities accounts in Russian rubles and foreign currency.

The simplest transactions for the purchase and redemption of securities are available to individuals. And for corporate clients it is possible to carry out splitting, consolidation or other complex procedures with securities.

What papers does it process?

Stock markets conduct transactions in securities exclusively through securities accounts. According to them, values ​​are credited and written off. Real bills, stocks, bonds, mortgages, savings certificates, which are printed on paper, are stored in the depository. This improves their safety and reduces physical wear.

Sberbank's depositary works with emission and non-equity securities:

• shares;
• bonds;
• bills;
• checks;
• bills of lading;
• mortgages;
• trust and savings certificates;
• deposit and bank certificates;
• warrants and other documents that are recognized as securities by their properties.

Sberbank also works with shares and depositary receipts. All transactions are credited and debited from clients' deposit accounts in accordance with the rules provided for by Russian legislation.

Conditions for carrying out activities

To obtain a license from the Federal Commission for the Securities Market (FCSM), allowing depository activities, the future depository must:

• develop internal instructions that describe in detail the internal processes of the organization (which do not contradict the legislation of the Russian Federation),
• select qualified personnel who must pass the appropriate exams and receive a certificate from the Central Bank of the Russian Federation.
• have the required amount of own funds of 20 million rubles

Each depository organization has its own internal regulations “Conditions (or procedure) for carrying out depository activities,” which describes the services of the depository, the procedure for interaction with depositors, maintaining securities accounts and other rules.

You should read this document before starting work.

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Tariffs for use

Tariffs for legal entities and individuals for depository services at Sberbank differ. The bank carries out some transactions for clients free of charge under service agreements.

Tariffs for individuals

Tariffs for legal entities and individual entrepreneurs

Starting from April 2022, tariffs for entrepreneurs are equal to tariffs for legal entities.

All bank clients who work with mutual funds or other investment programs cooperate with the Sberbank Depository. Brobank talks about how to make money from investing in his articles. Here you can also get acquainted with the rating of mutual funds and what you should rely on when choosing a fund.

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about the author

Klavdiya Treskova - higher education with qualification “Economist”, with specializations “Economics and Management” and “Computer Technologies” at PSU. She worked in a bank in positions from operator to acting. Head of the Department for servicing private and corporate clients. Every year she successfully passed certifications, education and training in banking services. Total work experience in the bank is more than 15 years. [email protected]

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Comments: 39

Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:

Author of the article: Klavdiya Treskova

Consultant, author Popovich Anna

Financial author Olga Pikhotskaya

1. Nikolay
   01/03/2022 at 03:27 Physical passport.
   persons of the Russian Federation as an identity card and a checkbook on which the deposit of a citizen of the USSR. SberBank accepts checks for the expenditure of depositary funds and in what maximum amount? Reply ↓
2. Vladimir
   07/14/2021 at 12:02

   06/03/21. I was paid dividends on 14 Polymetal shares. Where are they located? How to get them?

   Reply ↓
   Anna Popovich
   07.15.2021 at 15:06

   Dear Vladimir, you need to clarify this issue with the Sber support service using the short number 900 (from a mobile phone).

   Reply ↓

Shareholders' rights

Another function of the depository is to help enforce the rights of shareholders. Main situations: payment of dividends or coupons, share repurchase and shareholders' meeting.

When a company wants to contact the owner of a security, it does so through the registrants. These are also financial companies with a license from the Central Bank, which represent the interests of public companies: they find out from the depositories the contact information of those who currently own shares and tell the companies about it.

Dividends and coupon.

Registrars ask NSD how many shares and bonds are held in private depositories, after which the companies transfer the money to NSD. NSD transfers money to private depositories. They, in turn, withhold personal income tax and transfer payments to the broker. And the broker already credits dividends and coupons to clients’ accounts.

Share repurchase

. Sometimes companies buy back shares from shareholders. To sell shares, you will have to contact the depository. After that, he will convey to the company your desire to sell the shares. Usually you can fill out an application for the redemption of shares via the Internet, in the broker’s personal account, but some depositories require you to come to the office and write an application.

Meeting of shareholders

. When the board of directors wants to make an important decision for the company, such as a major transaction or dividend payment, it must hold a vote among shareholders. You can vote in three ways: by mail, through the service from NSD - e-vote.ru or through your depository.

If you do not wish to vote at a shareholders' meeting by mail, the depository can do so for you. The service costs 500-1500 rubles

If the company's charter states that it must send the form by mail, then you will receive a registered letter. You can fill out the form and mail it back to the company. Some, the Moscow Exchange or Alrosa, allow you to participate in voting for free through the e-vote service. You can register on it through State Services.

If these options do not suit you, you can ask the depository to vote for you. This can usually be done through the broker's personal account. This is a paid service and costs on average 500-1500 rubles.

Over-the-counter transactions.

If you make an agreement with another investor, you can buy or sell securities without going to the stock exchange. Shares and bonds can be transferred from one depository to another directly. The service is often available through the broker’s personal account and costs on average 1000-3000 rubles.