9 Jun 2023 18:18

Kazakhstan's ITS stock exchange wants own clearing infrastructure within one year, now working with SPB exchange

ASTANA. June 9 (Interfax) - The ITS stock exchange, which opened this week in Kazakhstan, uses the settlement and clearing infrastructure of SPB Bank, which acts as the settlement depository for the SPB Exchange , but plans to create its own settlement and clearing infrastructure based on the Astana International Financial Center within a year, the ITS press service said.

"At the first stage of ITS operation, the site will use the settlement and clearing infrastructure of the SPB Exchange, which specializes in trading in foreign shares. Meanwhile, ITS client accounts are separated from other accounts in global custodians," Timur Turlov, a member of the ITS board of directors and head of Freedom Holding Corp. is quoted as saying by the service.

This is a temporary solution that will be used at the first stage until the transition of the new Kazakhstan exchange to its own infrastructure, he said.

"We have a lot of work to do to deploy the same quality Kazakhstani infrastructure as SPB Bank has. We will do it, we understand how, and we have a specific action plan that is being implemented now," Turlov said.

Despite the use of SPB Bank's settlement and clearing solutions, ITS will not work with Russian brokers who serve retail investors from Russia, and does not plan to trade in Russian securities.

As previously reported, at the first stage, investors can trade more than 1,500 shares and depositary receipts, which are listed in the U.S. on the NYSE and NASDAQ stock exchanges. This list includes the securities from issuers such as Baidu Inc. , Intel Corp. , JD.com Inc. , Microsoft Corp. , NVIDIA Corp. , AstraZeneca, Rio Tinto, and Shell (SPB: RDS.A). ITS expects that during the first half of the year after the start of trading, about 15 professional participants will connect to the site. Retail investors will have access to trading on ITS as brokers connect.

As reported, trading in securities on ITS, which is under the jurisdiction of the Astana International Financial Center, began on June 7.

Two stock exchanges already operate in Kazakhstan: the country's largest platform, the Kazakhstan Stock Exchange, and the Astana International Exchange (AIX). The AIX exchange also operates under the jurisdiction of the Astana Financial Center. The securities of Kazakh issuers are primarily traded on both exchanges, and they work with Russian brokers among others.