FOREIGN BOARD OF TRADE APPLICATION FOR REGISTRATION

Open Joint Stock Company «Moscow Exchange MICEX-RTS»

Adress: 13, Bolshoy Kislovsky, Moscow, Russia, 125009
Telephone: +7 (495) 363-3232
Fax: +7 (495) 705-9622
E-mail: fbot@moex.com
Website: www.moex.com

Contact information:
Title Name Telephone Email
Managing Director,
+7 (495) 363-3232
Derivatives Market Roman Sulzhyk Sulzhyk.Roman@moex.com
ext. 26098
Department
Senior Associate,
+7 (495) 363-3232
Derivatives Market Ulyana Evstratova Ulyana.Evstratova@moex.com
ext. 26067
Department
Head of Legal +7 (495) 363-3232
Alexander Smirnov Alexander.Smirnov@moex.com
Department ext. 3265

Information on the Legal Entity:

The Moscow Exchange was founded in December 19, 2011 as a result of merger of MICEX and RTS
exchanges.
The full Legal Entity’s company registered name is Open Joint Stock Company “Moscow Exchange
MICEX-RTS”, the short Legal Entity’s company registered name is Moscow Exchange (hereinafter –
Moscow Exchange). Moscow Exchange acts in accordance with the Articles of Association approved
by the Annual General Shareholders Meeting held on December 08, 2011 and entered into force on
December 19, 2011 (as last amended on June 26, 2014 and entered into force on July 15, 2014).
Primary State Registration Number is 1027739387411 on October 16, 2002, assigned by Federal Tax
Service of Russia. Registration Number of a Legal Entity had been assigned until July 01, 2002 by
the Moscow Registration Chamber is 009.274 on March 16, 1992.

Signatures:

______________________________
Alexander Afanasyev
Chairman of the Executive Board of Moscow Exchange and CEO

DC\2654041.3
Exhibit А — General Information and Documentation ........................................................................... 4
Exhibit А-1 .......................................................................................................................................... 4
Exhibit А-2 ........................................................................................................................................ 14
Exhibit А-3 ........................................................................................................................................ 15
Exhibit А-4 ........................................................................................................................................ 16
Exhibit А-5 ........................................................................................................................................ 17
Exhibit А-6 ........................................................................................................................................ 18
Exhibit А-7 ........................................................................................................................................ 19
Exhibit А-8 ........................................................................................................................................ 20
Exhibit А-9 ........................................................................................................................................ 21
Exhibit В — Membership Criteria ......................................................................................................... 22
Exhibit B(1) ....................................................................................................................................... 23
Exhibit B(2) ....................................................................................................................................... 25
Exhibit С — Board and/or Committee Membership ............................................................................. 27
Exhibit C(1)....................................................................................................................................... 27
Exhibit C(2)....................................................................................................................................... 32
Exhibit C(3)....................................................................................................................................... 33
Exhibit C(4)....................................................................................................................................... 35
Exhibit D — The Automated Trading System ...................................................................................... 37
Exhibit D-1 ........................................................................................................................................ 37
Exhibit D-2 ........................................................................................................................................ 51
Exhibit E — The Terms and Conditions of Contracs proposed to be made available for trading in the
United States ........................................................................................................................................ 59
Exhibit Е-1 ........................................................................................................................................ 59
Exhibit Е-2 ........................................................................................................................................ 61
Exhibit Е-3 ........................................................................................................................................ 62
Exhibit E-4 ........................................................................................................................................ 63
Exhibit E-5 ........................................................................................................................................ 64
Exhibit Е-6 ........................................................................................................................................ 65
Exhibit F — The Regulatory Regime governing the Foreign Board of Trade in its home country
(country of registration) ........................................................................................................................ 66
Exhibit F(1) ....................................................................................................................................... 66
Exhibit F(2) ....................................................................................................................................... 72
Exhibit F(3) ....................................................................................................................................... 77
Exhibit F(4) ....................................................................................................................................... 81
Exhibit F(5) ....................................................................................................................................... 82
Exhibit F(6) ....................................................................................................................................... 83
Exhibit G — The Rules of the Foreign Board of Trade and enforcement thereof................................ 84
Exhibit G-1........................................................................................................................................ 84
Exhibit G-2........................................................................................................................................ 87
2

DC\2654041.3
 Exhibit G-3........................................................................................................................................ 95
Exhibit G-4........................................................................................................................................ 97
Exhibit H — Information Sharing Agreements among the Comission, the Foreign Board of Trade, The
Clearing Organization, and relevant Regulatory Authorities ................................................................ 98
Exhibit H(1)....................................................................................................................................... 98
Exhibit H(2)....................................................................................................................................... 99
Exhibit H(3)..................................................................................................................................... 100
Exhibit H(4)..................................................................................................................................... 101

DC\2654041.3
 Exhibit A-1

Exhibit А — General Information and Documentation

Exhibit А-1
A description of the following for the Foreign Board of Trade: location, history, size, ownership and
corporate structure, governance and committee structure, current or anticipated presence of offices or
staff in the United States, and anticipated volume of business emanating from members and other
participants that will be provided direct access to the Foreign Board of Trade’s trading system.
I. History of the Moscow Exchange

MICEX RTS

January, 1991 – Saint-Petersburg Exchange was

established.
January, 1992 – Moscow Interbank Currency
Exchange CJSC (MICEX) was established.
July, 1992 – The Central Bank of the Russian
Federation (the Bank of Russia) imposed the
mode of the uniform rate of Russian Ruble
determined on the basis of the US Dollar
exchange rate calculated on MICEX.
October, 1993 – Depositary Clearing Company
CJSC (DCC) was established. In May, 2007 DCC
became the part of the RTS Group. In January,
2013 DCC was integrated with National
Settlement Depositary (NSD) in the process of
establishment the only Central Depositary in
Russian Federation.
1994 – Saint-Petersburg Exchange launched
Derivatives Market and commenced trading on
US Dollar exchange rate futures.
July, 1995 – Nonprofit Partnership Russian
Trading Systems (NP RTS) was established.
NP RTS commenced trading in securities.
September, 1995 – NP RTS began calculating of
Index based on prices of the 13 most highly
capitalized liquid shares of the Russian issuers
(RTS Index). Since July 2005, the number of
shares, on the basis of which the RTS Index is
calculated, is fixed at 50.
October, 1995 – RTS Clearing Center CJSC
(RTS CC) was established by NP RTS.
RTS CC carried out clearing and served as
Central Counterparty on RTS’s Derivatives Market
since 2001 till December, 2012 when clearing
functional and risk management technology were
transferred to the NCC.
January, 1996 – MICEX commenced clearing on
Securities Market on the own basis. In
November, 2011 clearing functions was
transferred to NCC.
September, 1996 – MICEX launched Derivatives
Market and commenced trading in US Dollar
exchange rate futures.

DC\2654041.3
 Exhibit A-1

January, 1997 – National Depository Centre

CJSC (NDC) was established by MICEX and the 1997 – Saint-Petersburg Exchange launched
Bank of Russia as the MICEX’s securities and electronic trading system on derivatives.
settlement depositary. In 2010 NDC was renamed
in National Settlement Depositary (NSD).
June, 1997 – MICEX launched electronic trading
system (SELT) on currencies – FX Market
Section. US Dollar commenced trading on it first-
ever.
September, 1997 – MICEX began calculating of
Index based on prices of the 5 most highly
capitalized liquid shares of the Russian issuers
(MICEX Index). Since April 2007, the number of
shares, on the basis of which the MICEX Index is
calculated, is fixed at 30.
1998 – the Russian Economic Crisis. Saint-
Petersburg Exchange’s Derivatives Market
survived without default. All obligations to the
market participants have been successfully
executed.
November, 1999 – MICEX launched online stock
trading system, giving private investors access to
securities trading.

2000 – NP RTS was granted a Stock Exchange

License.
September, 2001 – NP RTS acquired derivatives’
trading technology from Saint-Petersburg
Exchange, giving it a name FORTS.

October, 2002 – MICEX joined the World

Federation of Exchanges as the correspondent
member.
December, 2003 – NP RTS adopted a resolution
to establish the RTS Stock Exchange OJSC
(RTS).

2004 – NP RTS’s stock exchange business was

transferred to the RTS.

April, 2005 – RTS commenced trading on USD/

RUB FX Futures (trading on Options on USD/
RUB FX Futures was commenced on November,
2007).

August, 2005 – RTS сommenced trading on the

RTS Index Futures. Since 2007 RTS Index futures
is the most liquid financial instrument of the
Russian derivatives market.

May, 2006 – National Clearing Centre CJSC

(NCC) was established.

June, 2006 – RTS launched Commodity Section

as a Derivatives Market Section. Exchange
trading in non-deliverable gold and oil futures
contacts began for the first time in Russia

DC\2654041.3
 Exhibit A-1

June, 2007 – MICEX commenced trading on the

MICEX Index Futures.

January, 2007 – RTS joined the World Federation

of Exchanges as the correspondent member.

2008 – Global Financial Crisis. RTS’s Derivatives

Market survived without a single default. All
obligations to the market participants have been
successfully executed through the RTS CC risk
management system, served as the Central
Counterparty.
November, 2008 – RTS commenced trading on
Single Stock Futures (trading on Options on
Single Stock Futures was commenced on
August, 2010).
June, 2009 - RTS Derivatives Market – FORTS –
was included in the TOP-10 of the world’s leading
Derivatives Exchanges by Futures Industry
Association. The Moscow Exchange as the RTS’s
assignee ranks No.8 in the TOP-10 on the results
of 20131.
October, 2011 – Establishment of Alliance of
exchanges of BRICS countries, which included
Brazilian Stock Exchange BM&F BOVESPA,
Russian Exchange MICEX, Hong Kong
Exchanges and Clearing Limited HKEx (China)
and Johannesburg Stock Exchange JSE (South
Africa). Indian National Stock Exchange (NSE)
and Bombay Stock Exchange (India).
Moscow Exchange

February, 2011 – Shareholders of MICEX and RTS signed the Intention Agreement on purchase the
controlling block of RTS’s shares.
August, 2011 – MICEX and RTS merger was approved by the Federal Antimonopoly Service.
September, 2011 – MICEX and RTS signed the Merger Agreement.
November, 2011 – MICEX’s clearing functions was transferred to NCC.
December, 2011 – two largest Russian exchanges were merged. United exchange received temporary
company name MICEX-RTS OJSC. Consolidation process of two Derivatives Market, FORTS and
MICEX, was launched.
March, 2012 – Five stock exchanges included in BRICS alliance, including MICEX-RTS, launched
cross-listing of derivativeson their stock indices.
June, 2012 – Annual General Shareholders Meeting of the MICEX-RTS approved the new united
exchange’s company name – Open Joint Stock Company «Moscow Exchange MICEX-RTS» (Moscow
Exchange).
November, 2012 – NSD was granted status of the only Central Depositary of the Russian Federation
by the Bank of Russia.
December, 2012 – Clearing and risk management functions conducted by RTS CC on the Moscow
Exchange Derivatives Market was transferred to NCC. Moscow Exchange Group completed the
centralization of clearing activity on the basis of NCC. In August, 2014 RTS CC was merged with NCC.

1
Source: FIA Volume Report (latest available data – on 2013).
6

DC\2654041.3
 Exhibit A-1

February, 2013 – Moscow Exchange carried out IPO on its own trading facility, within which shares
priced at RUB15 bln were placed that amounts to 11.8% of the authorized capital. Moscow Exchange’s
market capitalization amounted to about RUB 126.9 bln (USD 4.2 bln) according to the results of IPO.

March, 2013 – Moscow Exchange launched securities trading with settlement on T+2 in its Securities
Market.

June, 2013 – Moscow Exchange and Eurex Exchange, the derivatives arm of Deutsche Börse,
announced the launch of Single Stock Futures on German shares on the Moscow Exchange’s
Derivatives Market. Moscow Exchange launched futures contracts on the top five German issuers
(BMW AG, Daimler AG, Deutsche Bank AG, Siemens AG, and Volkswagen AG) in October 2013.

August, 2013 – Moscow Exchange and Eurex Exchange announced the execution of a cooperation
agreement to establish trading in FX futures.
October, 2013 – Moscow Exchange launched OTC Derivatives Market with a Central Counterparty.
Central Counterparty functional conducts by NCC.
October, 2013 – NCC became the first Qualified Central Counterparty in Russia – this status was
granted by the Bank of Russia.
Murch, 2014 – Moscow Exchange and Korea Exchange (KRX) signed the Collaboration Agreement in
in the field of information technologies, financial market infrustructure’s and cooperation in new
exchange’s product development.
April, 2014 – Moscow Exchange began calculating ofthe New Russian Volatility Index. Russian Market
Volatility Futures (RVI) has been traded since September, 2014.
June, 2014 – а new procedure for settling Single Stock Futures on Russian shares – via T+2 trades on
the Moscow Exchange’s Main Market – was applied for the first time.
September, 2014 – NSD (as a Central Depository, Settlement Depositary and Repositary) and NCC
(as a Central Counterparty) was granted status as systemically important financial institutions by the
Bank of Russia.

II. General Information of the Moscow Exchange

The Moscow Exchange is a legal entity established in accourdance with the legislation of the Russian
Federation and performs its business activity in the form of an open joint stock company. Moscow
Exchange is entitled to act, as well as set up branches and open representatives offices both, in the
territory of the Russian Federation.
Moscow Exchange is the largest exchange in Russia and Eastern Europe on the trading volume and
number of clients that was founded on December 19, 2011 as a result of merger of MICEX and RTS
exchanges. It is included into TOP-20 of the world’s leading market places by the volume of trading in
securities and summary capitalization of the traded shares and ranks No.8 in the TOP-10 of the largest
exchanges trading in derivative financial instruments 2.
The Moscow Exchange provides Russian and Foreign Investors, professional participants of the Financial
Market and their Clients with the wide range of opportunities for dealing in shares, bonds (Russian
Government and corporates), mutual funds shares, ETF’s, mortgage securities (mortgage participation
sertificates), derivative financial instruments, currency and commodities.
Clearing services at Moscow Exchange are provided by the Bank “National Clearing Centre” CJSC
(NCC). NCC has been the member of the European Association of Central Counterparty Clearing Houses
(EACH) since 2009 and has been a member of the Global Association of Central Counterparties (CCP12)
since 2011. NCC meets the CPSS/IOSCO standards, as described in Appendix 1 of Supplement S-1 to
this FBOT Application.
Settlements and depository services are provided by “National Settlement Depository” CJSC (NSD). NSD
meets all requirements to the Eligible Securities Depository under Rule 17f-7 and the criteria hereof.
The Moscow Exchange contains 6 (six) separate markets: (1) Securities Market, (2) Derivatives Market,
(3) FX Market, (4) Money Market, (5) Commodities Market and (6) Standardised OTC Derivatives Market

2
Source: FIA Volume Report (latest available data – on 2013).
7

DC\2654041.3
 Exhibit A-1

that are described below. As indicated below and in Exhibit E-1 to FBOT Application, derivatives that
Moscow Exchange intends to initially offer for direct access to U.S. participants are offered to trading only
on the Moscow Exchange’s Derivatives Market.
Since 2012, functions of the Сentral Сounterparty for all transactions executed in Moscow Exchange, as
well as the centralized clearing, are fulfilled by the NCC.
(1) Securities Market of the Moscow Exchange
Moscow Exchange's Securities Market consists of 2 (two) market sections:
1. The Main Market Sector includes 2 (two) markets that differs on technologies and list of instruments
admitted to trading:
 Equity Capital Market (T+ Market) is based on trading with a Central Counterparty, partial
collateral and deferred execution. Trades executed in the Main Trading Mode T+ (T+2 order
book) are settled two days after the trade is conducted (T+2 settlement cycle). Shares (ordinary
and preffered) of Russian and foreign issuers, Russian Depositary Receipts as well as ADR and
GDR, mutual fund shares, mortgage securities (mortgage participation sertificate), ETFs, as well
Russian Government Bonds, corporate bonds (including commercial papers), and regional
bonds are available for trading on T+ Market.
 Debt Capital Market (T0 Market) is based on trading with a Central Counterparty and full (100%)
prefunding. Trades executed in the Main Trading Mode are settled on the same day as the trade
is conducted (T0). Russian Government Bonds, corporate bonds, as well regional bonds and
municipal bonds are available for trading on T0 Market.
2. The “Classica” Sector is the oldest securities market sector in Russia (was established by the RTS in
July, 1995) whereas trading in stocks, bonds and mutual fund shares are executed without advance
assets’s depositing in full and settlements terms are flexible. Market sector’s participants may
choose settlement day with an option to settle in Russian rubles or in US dollars.
(2) Derivatives Market of the Moscow Exchange
The Derivatives Market, the futures and options market of the Moscow Exchange is a leading trading
market place for derivatives in Russia. The Derivatives Market combines the broadest range of
instruments, advanced infrastructure, reliability and guarantees of the Moscow Exchange as well as state-
of-the-art technology for futures and options trading.

Moscow Exchange ensures that the guarantee systems for derivatives transactions are up-to-date. While
improving its own system of guarantees, the Moscow Exchange constantly re-evaluates the guarantee
requirements imposed upon market participants. The Derivatives Market participants are trustworthy large
cap investment companies3 and banks. The derivatives contracts available on the Derivatives Market
include the widest range of instruments: 79 contracts (61 futures and 18 options) on indices, shares
(issued by russian and foreign issuers), currencies, interest rates, commodities.

Deliverable Futures include Single Stock Futures on shares issued by leading Russian companies,
Futures on Russian Government Bonds, as well Russian Eurobonds Futures.

Cash-settled Futures include:

 Equity Derivatives Futures: on various RTS indices (such as the RTS Index, RTS Blue Chips
Index, RTS Consumer and Retail Index, RTS Oil and Gas Index, Russian Volatility Index), MICEX
Index, BRICKS Indices futures (such as Bovespa Index, Hang Seng Index, FTSE/JSE TOP40
Index, SENSEX Index), Russian Market Volatility (RVI), on shares of Foreign Issuers traded on
the Frankfurt Stock Exchange (on ordinary shares of Siemens AG, Daimler AG, BMW AG,
Deutsche Bank AG and on preffered shares of Volkswagen AG);

 FX&Money Derivatives Futures: on FX rates (such as USD/RUB, EUR/RUB, EUR/USD,

AUD/USD, GBP/USD, USD/CHF, USD/JPY and USD/UAH), on 3-month MosPrime rate, on
Ruble OverNight Index Average (RUONIA). Moscow Exchange is preparing to launch USD/TRY,
USD/CAD and CNY/RUB futures contracts in Q4 2014;

3 According to Russian legislation under the “Investment Company” has in mind Russian resident legal entities - professional
participants of financial markets that owns license on broker and/or dealer and/or trust management activity, granted by the Bank of
Russia (previously – by the Federal Financial Markets Service) – Article 16 Federal Law No.325-FZ “On Organized Trading”.
8

DC\2654041.3
 Exhibit A-1

 Commodity Derivatives Futures: on commodities (such as oil, palladium, platinum, gold, silver,
copper and sugar);
 Options on Futures include contracts on shares issued by leading Russian companies, on RTS
Index, MICEX Index, foreign exchange rates (such as USD/RUB, EUR/USD and EUR/RUB,) and
commodities (such as Brent oil, gold, silver, platinum).
The most liquid instruments traded on Moscow Exchange are RTS Index Futures and USD/RUB FX
Futures. As set forth in Exhibit E-1 to this FBOT Application, these are the only derivatives contracts that
the Moscow Exchange intends to initially offer for direct access to U.S. persons.
(3) FX&Money Market of the Moscow Exchange
The Foreign Exchange Market of the Moscow Exchange (FX Market) is one of the most significant
segments of the Russian financial market. Approximately 600 (six hundred) credit organizations trade in
foreign currency on the Moscow Exchange’s FX Market. The market electronic trading system provides
transactions in US Dollar, Euro, Ukrainian Hryvnia, Kazakhstan Tenge, Belarusian Ruble, Chinese Yuan,
as well in FX swaps.
The Money Market of the Moscow Exchange provides repo and deposit and lending capabilities. In the
repo market, operations are carried out bilaterally (dealer-dealer repo), with the Central Counterparty
(NCC), and with the Bank of Russia. The line of credit and deposit operations include deposit auctions of
Federal Treasury of Russia, the Pension Fund of Russia, State Corporation “Bank for Development and
Foreign Economic Affairs (Vnesheconombank)”. Money Market instruments provide efficient distribution
of Stock Market liquidity between bidders, and are used by the Bank of Russia for the implementation of
monetary policy.
(4) Commodities Market of the Moscow Exchange
Projects for organization and development of exchanging commodities market are implemented through
Commodities Market of the Moscow Exchange (was launched in October, 2013) as well as the National
Mercantile Exchange CJSC (NAMEX) (was launched in July, 2002 and currently is a part of the Moscow
Exchange Group).
Precious Metals spot-trading in gold (GLD) and silver (SLV) is conducted on the Moscow Exchange’s FX
Market trading platform. The National Clearing Centre (NCC) acts as the central counterparty and
clearing house. Moscow Exchange’s Commodities Market plans to launch spot-trading in grain in 2015.
Currently, trading in grain conducted on NAMEX that authorized by the Ministry of Agriculture of the
Russian Federation. Since 2002, NAMEX has participated in the preparation, organization and conduct of
exchange trading in conduct of the state procurement and commodity interventions for regulation of the
agricultural commodities.
(5) OTC Derivatives Market of the Moscow Exchange
The Moscow Exchange has launched its new cleared OTC Derivatives Market, marking a major step
towards Russia’s G-20 commitments. The new service allows participants of that Market to execute
trades on OTC interest rate, overnight index, FX and cross-currency swaps and to clear these trades
through Russia’s NCC as a Central Counterparty.
New instruments were introduced on October 28, 2013 and included interest rate swaps on RUONIA,
Mosprime/LIBOR rates, cross currency and FX USD/RUB swaps, as well as USD/RUB forward with
maturities from intraday to 5 (five) years.
III. Size4
The Moscow Exchange’s Authorized Capital amounts to RUR 2 278 636 493 (more than USD 57.8 mln.)
for the six-month period ended on September 30, 2014. Proprietary Funds of the Moscow Exchange as
of September 30, 2014 more than RUR 65.1 bln. (more than USD 1.6 bln.).
IV. Shareholders Structure
The following table sets Shareholders of Moscow Exchange holding 5% and more of the ordinary shares
(as of May 12, 20145):

4 According to the Consolidated Interim Condensed Financial Statements (IFRS) for the nine-month period ended September 30,
2014
5 On the the 2014’ record date
9

DC\2654041.3
 Exhibit A-1

Amount of Voutes
No. Shareholder
Number of shares %

1. The Central Bank of the Russian Federation (the Bank of Russia) 300 003 905 13.166

2. OJSC Sberbank of Russia 227 682 160 9.992

State Corporation “Bank for Development and Foreign Economic
3. 191 299 389 8.395
Affairs (Vnesheconombank)”
4. European Bank for Reconstruction and Development 138 172 902 6.063
5. Chengdong Investment Corporation 127 989 506 5.616

V. Organizational Structure of the Moscow Exchange Group (as of August 6, 2014)

Appendix 1 to this FBOT Application contains more information regarding the organizational structure of
Moscow Exchange.
Moscow Exchange ordinary shares are listed on the Moscow Exchange trading platform (under the
ticker MOEX) since February 15, 2013. Total amount of outstanding ordinary shares is 2 278 636 493.
Total amount of declared ordinary shares is 9 818 920 693.
VI. Management Structure
The management bodies of the Moscow Exchange are as follows:
 General Shareholders Meeting;
 Supervisory Board;
 Chairman of the Executive Board (CEO) (sole executive body);
 Executive Board (collegial executive body).
The General Shareholders Meeting comprise the highest management body of the Moscow Exchange.

10

DC\2654041.3
 Exhibit A-1

The Supervisory Board is the governing body of the Moscow Exchange, in charge of general
management of the Moscow Exchange, except for matters referred by the Federal Law No.208-FZ “On
Joint Stock Companies" to the exclusive competence of the General Shareholders Meeting. The
members of the Supervisory Boards are elected by Shareholders at the General Shareholders Meeting.
The main functions of the Supervisory Board:
 determination of the strategy and priority directions of development of the company;
 ensuring effective control over financial and economic activity of the company;
 providing implementation and protection of the rights of shareholders as well as contribute to the
resolution of corporate conflicts;
 ensuring the effective operation of the executive bodies, including through the exercise of
control over their activities.
A complete list of Supervisory Board’s functions defined by the Articles of Association of the Moscow
Exchange (see 03_Appendix 2 to FBOT Application).
Current (day-to-day) Moscow Exchange’s activitie carried out by the executive bodies – the Chairman of
the Executive Board and the Executive Board. Executive bodies accountable to the General Shareholders
Meeting and the Supervisory Board.
The following issues are within competence of the Executive Board:
 development of proposals for the Moscow Exchange’s strategy;
 set of the procedure for maintaining and approval of the internal documents in general and
confidential documentation management at the Moscow Exchange;
 approval of investment criteria (principles) and the order for placing temporarily;
 available cash funds, taking resolutions on placing temporarily available cash funds and
management of the Moscow Exchange’s cash funds, coordinating the terms for agreements on
the Moscow Exchnage’s property trust management with respect to their conformity with the
adopted criteria;
 determination of effective date for the internal documents approved by the Supervisory Board of
the Moscow Exchange if the relevant resolution of the Supervisory Board provides for the same;
 adoption of the number of internal documents of the Moscow Exchange etc.
Chairman of the Executive Board (CEO):
 without Power of Attorney acts on behalf of the Moscow Exchange, including: representing the
Moscow Exchange’s interests, making a deals and undersigning a documents on behalf of the
Moscow Exchange;
 issues the Power of Attorney, establishes procedures for signing contracts and agreements, the
order issuing Powers of Attorney;
 approves staff, issues orders and directives, gives instructions that are binding for all employees
of the Moscow Exchange;
 submits issues for consideration to the Supervisory Board, guarantees preparation of the required
materials, proposals and draft resolutions to the Supervisory Board and the General
Shareholders Meeting;
 adopts the internal documents of the Moscow Exchange;
 adopts resolutions on opening of projects, approves reports on project implementation;
 resolves the issues arising when the Moscow Exchange performs its activity on the exchange
trading (markets);
 other issues which are in competence of the General Shareholders Meeting, Supervisory Board
and Executive Board under the federal laws and these Articles of Association
For more information, see Exhibit C and Appendix 2 to the FBOT Application.
VII. Committees Structure
The Moscow Exchange has 2 (two) committees directly regulates Derivatives Market’s activity:
1. Derivatives Market Committee
The Derivatives Market Committee is the Exchange Section Council for the Derivatives Market
pursuant to Article 10 Federal Law No.325-FZ “On Organized Trading”.
The Derivatives Market Committee consists of 25 (twenty five) members including the Committee
Chairman and Deputy Chairman.

11

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 Exhibit A-1

The main functions of the Derivatives Market Committee:

 consideration the issues within its competence and making recommendations to the
authorised bodies of the Moscow Exchange;
 interaction between the Moscow Exchange and Market Participants, representation of
Trading Participants’ interests on the issues regarding organization of organized trading in
derivatives contracts aiming at giving due consideration to the needs of Trading Participants
in connection with organization of organized trading in derivatives contracts;
 consideration of issues regarding change of Exchange’s fees for conducting organized
trading on the Derivatives Market of the Moscow Exchange,
 consideration of issues concerning amendments to several documents of the Exchange
(Trading Rules, Parameters of Derivatives Contracts, other internal documents) and
adoption of relevant recommendations for the Supervisory Board of the Moscow Exchange
or other authorized body of the Moscow Exchange,
 consideration of issues concerning change of Clearing Organization that clears obligations
under trades executed on the Derivatives Market of the Moscow Exchange, as well as
change of the legal entity performing the functions of a Central Counterparty.
The full list of functions, tasks, formation, working and decision making procedures for the
Derivatives Market Committee is established by the Provisions on the Derivatives Market
Committee of the Moscow Exchange, approved by the Supervisory Board.
2. Information and Technology Services Committee
The Information and Technology Services Committee is the permanent negotiating body of the
Moscow Exchange that acts in accordance with the laws of the Russian Federation, the Articles of
Association of the Moscow Exchange, resolutions of the Moscow Exchange’s Supervisory Board
and Executive Board and other internal documents of the Moscow Exchange.
The Information and Technology Services Committee consists of 25 (twenty five) members
including the Committee Chairman and Deputy Chairman.
The main functions of the Information and Technology Services Committee:
 interaction with companies of the Moscow Exchange Group, the Moscow Exchange’s
Trading Participants and with the companies being the developers of software on the issues
of development of information technologies applied by the Moscow Exchange;
 representation of Trading Participants’ interests on the issues regarding development of
information technologies, improvement of software and hardware and support of the
Moscow Exchange’ trading system and submission thereof to the Moscow Exchange’s
Supervisory Board and/or Executive Board;
 preparation of recommendations on interaction with companies of the Moscow Exchange
Group, Trading Participants as well as with the companies being the developers of software
on the issues of development of information technologies applied by the Exchange;
 provision of full and extensive consideration of needs of professional participants of financial
market — the participants of trading in the sphere of development and support of the
Exchange trading system;
 participation in testing of the implemented (updated) means for trading holding;
 preparation of recommendations on possible improvement of means for trading holding.
The full list of the functions, tasks, formation, working and decision making procedures for the
Information and Technology Services Committee is established by the Provisions on the
Information and Technology Services Committee of the Moscow Exchange, approved by the
Supervisory Board.
For more information, see Exhibit C to this FBOT Application.
VIII. Current or Anticipated Offices in the United States
Currently the Moscow Exchange does not plan to have any offices in the United States, does not provide
investment services, technical support, trade processing or any other related functions in the United

12

DC\2654041.3
 Exhibit A-1

States. The Moscow Exchange’s representatives periodically attend the industry conferences/trade
shows and educational programs in USA such as:
 FIA Futures&Options Expo (organized by FIA Futures Industry Assosiation);
 Trade Tech USA (organized by WBR – Worldwide Business Research)
 CFTC Simposium and Training Program for Regulators on Regulation of Derivatives Products,
Markets, and Financial Intermediaries for International Market Authorities (organized by U.S.
Commodity Futures Trading Comission);
 Trading Show New York (organized by Terrapin);
 FX Weeks USA (organized by Incisive Media Services Limited)
 Boston Convention & Exhibition Center (organized by Siboss);
IX. Forecasted Volume of Transactions
To be completed
X. International Relations
The Moscow Exchange is a member of the World Federation of Exchanges (“WFE”), the Federation of
European Stock Exchanges (“FESE”), the Futures Industry Association (“FIA”) and Futures and Options
Association (“FOA”).
The Moscow Exchange also has joint ventures with exchanges of BRICS alliance and with the
Organization for Economic Co-operation and Development (“OECD”), as well as Collaboration Agreement
with Eurex Exchange (derivatives arm of Deutsche Börse Group), and with Korea Exchange (KRX).

13

DC\2654041.3
 Exhibit A-2

Exhibit А-2
Articles of association, constitution, or other similar organizational documents.
See attached Appendix 2 of this FBOT Application.

14

DC\2654041.3
 Exhibit A-3

Exhibit А-3
(1) Membership and Trading Participant Agreements.
See attached as Appendix 3 of this FBOT Application,
Accordingly to Russian legislation only Russian companies are allowed to participate in trading directly.
(2) Clearing Agreements.
See attached Appendix 4 of this FBOT Application.

15

DC\2654041.3
 Exhibit A-4

Exhibit А-4
Terms and conditions of contracts to be available through direct access (as specified in Exhibit E).
See attached Appendix 5 of this FBOT Application for the terms and conditions of the RTS Index Futures
contract.
See attached Appendix 6 of this FBOT Application for the terms and conditions of the USD/RUB
FX Futures contract.

16

DC\2654041.3
 Exhibit A-5

Exhibit А-5
The national statutes, laws and regulations governing the activities of the Foreign Board of Trade and its
respective participants.
See attached Appendix 8 of this FBOT Application for a compilation of laws and regulations governing the
activities of the Moscow Exchange and its participants.

17

DC\2654041.3
 Exhibit A-6

Exhibit А-6
The current rules, regulations, guidelines and bylaws of the Foreign Board of Trade.
See attached Appendix 9 of this FBOT Application for the Moscow Exchange’s Derivatives Market
Trading Rules.

18

DC\2654041.3
 Exhibit A-8

Exhibit А-7
Evidence of the authorization, licensure or registration of the Foreign Board of Trade pursuant to the
regulatory regime in its home country jurisdiction and a representation by its regulator(s) that it is in good
regulatory standing in the capacity in which it is authorized, licensed or registered.

I. Information on the State Registration

The following documents evidence the Moscow Exchange’s registration with the State:
Primary State Registration Number is 1027739387411 on October 16, 2002, assigned by Federal Tax
Service of Russia (as last amended on July 15, 2014). Registration Number of a Legal Entity had been
assigned until July 01, 2002 by the Moscow Registration Chamber is 009.274 on March 16, 1992.
II. Information on the Existence of Authorizations (Licenses) or Admissions to Particular Types
of Activities
The following documents evidence the Moscow Exchange’s authorization to engage in particular types of
activities:
Type of activity: License of the Exchange
 License number: 077-001
 Date of issue of the License: August 29, 2013
 Authority (organization) that issued the respective license: Federal Financial Markets Service
 License term: for an indefinite term
See attached Appendix 10 of this FBOT Application.

19

DC\2654041.3
 Exhibit A-8

Exhibit А-8
A summary of any disciplinary or enforcement actions or proceedings that have been brought against the
Foreign Board of Trade, or any of the senior officers thereof, in the past 5 (five) years and the resolution
of those actions or proceedings.
The Moscow Exchange came into existence on December 19, 2011 following the merger of CJSC MICEX
and OJSC RTS. Since the merger, the Federal Financial Markets Service (“FFMS”) ordered the Moscow
Exchange to take the following actions to eliminate violations:
 May 8, 2013: Ordered the Moscow Exchange to provide the FFMS with an auditor’s report through
April 1, 2013 and the calculation of the Moscow Exchange’s funds at the last reporting date. Result:
The order was satisfied and the breach was eliminated.
 April 5, 2013: Ordered the Moscow Exchange to provide information explaining the reasons for
non-disclosure of information about changes in the shareholders’ structure, which members own
less than 5% in “Sberbank of Russia.” Result: The order was satisfied and the breach was
eliminated.
 April 3, 2012: Ordered the Moscow Exchange to issue rules preventing the use of insider
information and market manipulation regarding “derivatives transactions.” Result: The order was
satisfied and the breach was eliminated.
Before the merger of CJSC MICEX and OJSC RTS, the following administrative actions were taken
against RTS as the organizer of trading on the Derivatives Market (since 2008):
 November 2010: Administrative sanction (penalty) for a shortcoming in the company’s internal
control (absence of the anti-money laundering and counter financing of terrorism policy).
 August 2010: Administrative sanction (penalty) for a controller.
 June 2010: Administrative sanction (penalty) for late notification of the regulator on a technical
glitch during the trading.
 June 2009: Administrative sanction (penalty) for late notification of the regulator on a technical
glitch during the trading.
Additionally, the following actions were imposed on the MICEX in the last 5 (five) years:
 May 18, 2012: FFMS fined the MICEX 10,000 USD for infringing on the decision-making
procedures regarding suspension and resumption of trading on the stock market in the “main
market” sector.
 April 3, 2012: The FFMS ordered the MICEX to issue rules preventing the use of insider
information and market manipulation regarding “derivatives transactions.” Result: The order was
satisfied and the breach was eliminated.
 March 2, 2012: The FFMS fined the MICEX 22,580 USD for committing an administrative offense
under Part 9 st.15.29 Administrative Code.
 October 13, 2010: The FFMS ordered the MICEX to modify its website to comply with paragraph
7.2 of the Regulation “On Securities Market” by making certain information easily accessible.
Result: The order was satisfied and the breach was eliminated.
 April 28, 2010: The FFMS fined the MICEX 10,000 USD for trading equity securities during their
placement that did not meet the requirements of section 12 of the Administrative Code st.16.29.

20

DC\2654041.3
 Exhibit A-9

Exhibit А-9
An undertaking by the Chief Executive Officer(s) (or functional equivalent[s]) of the Foreign Board of
Trade to notify Commission staff promptly if any of the representations made in connection with or related
to the Foreign Board of Trade’s Application for registration cease to be true or correct, or become
incomplete or misleading.
See attached.

21

DC\2654041.3
 Exhibit A-9

Ms. Melissa D. Jurgens,

Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Dear Ms. Jurgens,

We hereby confirm that at the moment of the FBOT Application filing, all data contained in the documents
and applications is complete and true. We undertake to notify CFTC staff promptly if any of the
representations made in connection with or related to the FBOT Application for registration cease to be
true or correct, or become incomplete or misleading.

Best regards,

Alexander Afanasiev, Chairman of the Executive Board and CEO

22

DC\2654041.3
 Exhibit B(1)

Exhibit В — Membership Criteria

Exhibit B(1)
A description of the categories of membership and participation in the Foreign Board of Trade and the
access and trading privileges provided by the Foreign Board of Trade. The description should include any
restrictions applicable to members and other participants to which the Foreign Board of Trade intends to
grant direct access to its trading system.
Trading Participants may be only legal entities satisfying the requirements of the laws of the Russian
Federation. Trading Participants must also satisfy The Regulations on Admission to trading on the
Derivatives Market of the Moscow Exchange (“Regulations on Admission”) set forth in The Rules of
Executing Derivatives Trades on Derivatives Market of the Moscow Exchange (“Trading Rules”).
See attached Appendix 9 of this FBOT Application for the Moscow Exchange’s Trading Rules, and
Appendix No.1 of the Trading Rules for the Regulations on Admission.
Trading Participants are divided into the following categories:
1) Central Counterparty (NCC);
2) General Settlement Entity (with permissions to trade in all sections of the Derivatives Market on its
own behalf and for its own account or for the account of customers);
3) Special Settlement Entity of the Securities section (with permissions to trade in the Security section
of the Derivatives Market on its own behalf and for its own account or for the account of
customers);
4) Special Settlement Entity of the Money section (with permissions to trade in the Money section of
the Derivatives Market on its own behalf and for its own account or for the account of customers);
5) Special Settlement Entity of the Commodities section of the first type (with permissions to trade in
the Commodity section of the Derivatives Market on its own behalf and for its own account or for
the account of customers);
6) Special Settlement Entity of the Commodities section of the second type (with permissions to trade
in Commodity section of Derivatives Market on its own behalf and for its own account).
On the Derivatives Market, Settlement Entity may either have access to all derivative instruments, or may
be limited to trading equity, money, or commodity derivatives.
Trading Participants may access the Moscow Exchange through direct access or as a Client of a Trading
Participant. If the Moscow Exchange’s FBOT application is approved, U.S. residents will only be permitted
to access the Derivatives Market as Clients of Trading Participants (see below for further information).
Clients of Trading Participants are not Participants of the Moscow Exchange, but are serviced by Trading
Participants.
Settlement Entities are permitted to do the following:
 conduct transactions on its behalf and at its own cost and expense;
 conduct transactions on its behalf and at the expense of the serviced clients (including Brokerage
Firms);
 conduct settlements on the conducted transactions directly with NCC;
 control the work of Clients and Brokerage Firms in the course of trading.
Clients of Settlement Entities are permitted to do the following:
 conduct transactions at one’s own cost and expense;
 conduct transactions at the expense of the serviced clients (for entities – Brokerage Firms);
 place orders in the Trading System through the client terminal;
The main difference between the permitted activities of Settlement Entities and Clients of Settlement
entities is that clients do not interact directly with NCC (do not have any agreements with it) and do not
have their own accounts, therefore, Clients can’t conduct settlements on the conducted transactions
directly with NCC. All clients’ actions are performed through the Clearing Participants.
If the Moscow Exchange’s FBOT application is approved, U.S. residents connecting to the Moscow
Exchange’s Derivatives market would be subject to the following restrictions:

23

DC\2654041.3
 Exhibit B(1)

According to Article 16 of The Federal Law No.325-FZ “On Organized Trading,” the Moscow Exchange
may only grant trading membership to domestic companies. Non-residents may get an access to trading
via an exchange mediator, however. To make trades on the Moscow Exchange’s Derivatives market,
non-residents must therefore become Clients of Settlement Entities (Brokerage Firms) admitted to the
Derivatives Market.
According to Article 3 of Federal Law No.39-FZ “On Securities Market,” client cash transferred to a broker
for its transaction in securities or executing derivatives contracts as well as cash received by a broker
under such trades or contracts must be kept on the specific bank account(s) opened by the broker with a
credit organization (the special brokerage account). Brokers must keep records for each client whose
money is kept on such special brokerage accounts and report to the clients. Clients’ money kept on the
special brokerage accounts must not be enforced as broker’s obligations.
U.S. residents (individuals and legal entities) are subject to the general client registration procedure
specified in the Clearing Rules. See Appendix 3 to Supplement S-1 (Article 11 of the Clearing Rules).
The Clearing Centre registers Clearing Member’s Clients and assigns a Clearing Member Client’s Code
to each Clearing Member’s Client respectively. The Clearing Member’s Clients shall be registered upon
request of the Clearing Member and based on the information received from the Clearing Member in
accordance with the regulatory acts of the Bank of Russia. The Clearing Centre shall be entitled to cancel
registration of the Clearing Member’s Clients on its own discretion if the requirements specified by the
Clearing Rules are not met.
Thus, U.S. participants will be able to participate in the trading as follows, provided that Moscow
Exchange obtains the FBOT status:

Contract on Service
Brokerage Agreement on
Services Organized Trading
Client Broker
Moscow Exchange
[U.S. Resident] [Russian Resident]

For Moscow Exchange the preferable approach is to qualify Trading Participants under CFTC Part 30.10.
who will able to offer an access to US-residents for trading on the MOEX’s Derivatives Market. Due to the
fact that Part 30.10. qualification can be obtained from CFTC by the FBOT itself on behalf of its Trading
Participants, the Moscow Exchange assumes to provide such option for its participants.

24

DC\2654041.3
 Exhibit B(2)

Exhibit B(2)
A description of all requirements for each category of membership and participation on the trading system
and the manner in which members and other participants are required to demonstrate their compliance
with these requirements.
I. Professional Qualification
A description of the specific professional requirements, qualifications, and/or competencies required of
members or other participants and/or their staff and a description of the process by which the Foreign
Board of Trade confirms compliance with such requirements.
Employees at companies operating as the professional participants must meet certain requirements.
Such requirements are set forth in the the Bank of Russia’s regulations on financial market specialists.
They are applied to directors, directors of branches, deputy directors, and heads of subdivisions,
controllers and specialists of companies conducting their professional activities on the financial market.
In general, the above-mentioned categories of Trading Participant’s employees are required:
 to obtain a qualification certificate from the Bank of Russia according to a company profile;
 to have a valid qualification certificate (if the certificate was ever revoked three years required to
pass since the revocation);
 to have a professional higher education degree;
 to have a work experience with companies conducting their activities on the financial market.
Additionally, the Moscow Exchange requires that candidate fot the admission to trading satisfy the
following conditions:
 to obtain a valid license as a professional securities market participant;
 to meet financial standards of activities in accordance with point (ii);
 to enter into a Service Agreement on Organized Trading with the Moscow Exchange;
 to be admitted by the NCC to the clearing services in accordance with the Clearing Rules;
 to be provided by the Technical Center the right to use of software required to participate in the
trading and has a technical possibility to participate in the trading on the Derivatives Market;
 to be a member of the Moscow Exchange Electronic Document Data Interchange and the RTS
Electronic Data Interchange unless otherwise prescribed by the Exchange’s decision;
 in respect of the candidate is not set a prohibition or restriction on conduct the transactions,
associated with participation in trading.
The full list of documents to be submitted by the Candidate for the Admission to trading on the Derivatives
Market and registration as a Trading Participant is given in Appendix No. 02 to The Regulations on
admission.
See attached Appendix 9 of this FBOT Application for the Moscow Exchange’s Trading Rules, and
Appendix No.1 of the Trading Rules (Regulations on Admission to trading), attached as Appendix 9 of this
FBOT Application.
II. Authorization, Licensure and Registration
A description of any regulatory and self-regulatory authorization, licensure or registration requirements
that the Foreign Board of Trade imposes upon, or enforces against, its members and other participants
including, but not limited to any authorization, licensure or registration requirements imposed by the
regulatory regime/authority in the home country jurisdiction(s) of the Foreign Board of Trade. Please also
include a description of the process by which the Foreign Board of Trade confirms compliance with such
requirements.
Trading Participants of the Moscow Exchange must obtain the following authorizations, licenses or
registrations:
 General Derivatives Market’s Trading Participants: must obtain a licenses of a professional
participant of the securities market for performance of brokerage and/or dealer and/or trust
management activities;
 Special Trading Participants of the Derivatives Market’s Equity Section: licenses of professional
participant of the securities market for performance of brokerage and/or dealer and/or trust
management activities

25

DC\2654041.3
 Exhibit B(2)

 Special Trading Participants of the Derivatives Market’s FX&Money Section: licenses of

professional participant of the securities market for performance of brokerage and/or dealer
and/or trust management activities
 Special Trading Participants of the Derivatives Market’s Commodities Section of the first type:
license for performance of brokerage which allows broker to execute derivatives agreement with
commodity basic asset and/or licenses of professional participant of the securities market for
performance of brokerage and/or trust management activities.
With regard to Trading Participant that is a credit institution: it shall have a valid banking license for all
categories of membership.
With regard to Trading Participant that is a Special Trading Participants of the Derivatives Market’s
Commodities Section of the second type – there is no special requirements, except financial.
III. Financial Standards of Activities
The Moscow Exchange imposes the following financial requirements:
 Trading Participant’s own assets calculated pursuant to the procedure established by the Bank of
Russia’s regulatory acts must be at least RUR 35 mln. (USD 875 ths.) – to be admitted to trading
in equity or FX/money contracts on the Derivatives Market as a Special Trading Participants of
the Derivatives Market’s Equity Section or as a Special Trading Participants of the Derivatives
Market’s FX&Money Section or to be admitted to trading in commodities contracts on the
Derivatives Market as a Special Trading Participants of the Derivatives Market’s Commodities
Section of the first type.
 Trading Participant’s own assets must be at least RUR 5 mln. (USD 125 ths.) – to be admitted to
trading in commodity contracts on the Derivatives Market as a Special Trading Participants of the
Derivatives Market’s Commodities Section of the second type;
For the purposes of ensuring the observance by the Trading Participant of the requirements of the current
legislation and internal documents of the Moscow Exchange, and to minimize risks connected with
transactions concluded by the Moscow Exchange’s Trading Participant, the Moscow Exchange requires
Trading Participant to provide on a regular basis the following documents6:
 calculation of the Trading Participant’s own funds (capital);
 monthly and quarterly reports of the Trading Participant submitted to the Bank of Russia in
accordance with the requirements of the current legislation.
In addition, the Moscow Exchange requires Settlement Entities to provide documents and information that
were submitted to the Moscow Exchange upon admission of the professional participant to trading, if the
respective information and documents have been changed. In order to confirm their financial position, the
Settlement Entities of Moscow Exchange provide information and reporting consisting of and within the
time-limits specified in accordance with the Moscow Exchange’s internal document “Procedure for
Provision of Information and Reporting to the Moscow Exchange”.
If the Moscow Exchange detects any violation on the part of the Trading Participant when reviewing these
documents, the Moscow Exchange will notify the Bank of Russia of such a violation.
IV. Procedure for Connection to the Derivatives Market of Moscow Exchange as a Client
Any legal entity and individual may participate in trading on the Derivatives Market of Moscow Exchange
as a Trading Participant’s Client. For this purpose it is necessary to execute a Brokerage Agreement7 with
such legal entity (professional participant of the securities market for performance of brokerage and/or
dealer and/or trust management activities).

6 The full list of documents is given in the Procedure for Provision of Information and Reporting to the Moscow Exchange
7 Brokerage Agreement is a standard contract between the broker and the client (but not the document of the Moscow Exchange).
26

DC\2654041.3
 Exhibit C(1)

Exhibit С — Board and/or Committee Membership

According to the Moscow Exchange’s Articles of Association, the Moscow Exchange may, and in cases
prescribed by the Articles of Association and regulatory legal acts of the Russian Federation, is obliged to
establish advisory-consultative bodies under the Supervisory Board of the Company and committees of
users of services (hereinafter referred to as the users’ committees) of the Company.

Decisions related to the establishment of the advisory-consultative bodies, the quantitative structure of
such bodies, election of their members, and approval of provisions regulating their activities may be
adopted by a ¾ majority of votes of members of the Supervisory Board of the Company participating in
the meeting. The same decisions with regard to the users’ committees require a majority of votes of the
Supervisory Board of the Company participating in the meeting.

The main committees of the Moscow Exchange include: Stock Market Committee, Currency Market
Committee, Derivatives Market Committee, Fixed-Income Securities Market Committee, REPO Market
and Securities Lending Committee, Information Technological Services Committee, Index Committee.

Exhibit C(1)
A description of the requirements applicable to membership on the governing board and significant
committees of the Foreign Board of Trade.

I. Criteria of Membership in the Supervisory Board

1. A member of the Supervisory Board shall be a natural person only. A member of the Supervisory
Board may not be a Shareholder of the Company.
2. A member of the Supervisory Board may not be a member of the Audit Committee of the Company.
3. The Supervisory Board may include minimum Two (2) members of the Executive Board of the
Company.
4. Members of the Supervisory Board shall meet requirements set by the current legislation of the
Russian Federation, included but not limited to, the Federal Law On Securities Market, and the laws
and regulations on financial markets.
5. Members of the Supervisory Board shall have such knowledge, skills and experience as may be
necessary to make decisions on the matters within competence of the Supervisory Board and
required for the members of the Supervisory Board to effectively perform their functions.
6. At least 3 (three) of the total number of members of the Supervisory Board members shall be
independent Directors.
7. Members of the Supervisory Board meeting the following criteria shall be acknowledged as the
independent directors:
 are not members of the Executive Board, Revision Commission and/or employees of the
Company, legal entities controlling the Company or being under control of the Company at the
time of election and within three (3) years preceding the election;
 are not members of the executive bodies and/or employees of another organization, with the
remuneration to be determined (considered) by the Board of Directors (Supervisory Board)
Remuneration Committee of such company, in case the member of executive bodies and/or
employee of the Company is a member of the Remuneration Committee of the organization
specified;
 are not close relatives (spouses, parents, children, brothers or sisters) of the Company’s
Executive Board members, members of Revision Commission, Head of Internal Control and
Head of Internal Audit;
 are not persons controlling the Company;
 are not parties on liabilities with the Company, controlling the Company or being under control
of the Company according to conditions of which they are entitled to obtain property (receive
funds) making ten (10) or more percent of total annual income of the member of the
Supervisory Board, other than remuneration for participation in the Company’s Supervisory
Board activity;
 do not represent the State

27

DC\2654041.3
 Exhibit C(1)

 are not state of municipal officers in the Russian Federation, employees of the Bank of Russia
at the time of election and within 1 year preceding the election;
 are not obliged to vote on one several questions within the competence of the Supervisory
Board in a predetermined way or upon the agreement of the third parties, inter alia in
accordance with the directive of Russian Federation, constituent of the Russian Federation or
municipal entity;
 are not employees and/or members of the managerial bodies of professional intermediary -
exchange services receiver, substantial shareholder, contractor or competitor of the Company,
as well as legal entities controlling substantial contractor (competitor) of the Company or
organizations under control thereof.
 is not an employee and/or member of the managerial body of the Company’s service provider
(controlling person or a person under its control) or receives remuneration and other material
benefits from the Company’s shareholder – owner of 5 or more percent of voting shares in the
Company’s authorized capital within 1 year preceding election, in the amount exceeding a half
of the amount of annual fixed remuneration of the Company’s Supervisory Board member.
 was not a member of the Supervisory Board of the Company in total for more than seven (7)
years prior to the election;
 is not a member of the Board of Directors (Supervisory Board) of more than 2 (two) legal
entities being under control of the Company’s substantial shareholder or a person controlling
substantial shareholder of the Company;
 within the last 3 (three) years did not provide the Company or legal entities under its control
with the services of appraiser, tax consultant, audit or business accounting services, or within
the last 3 (three) years was a member of the managerial bodies of organizations provided
such services to the legal entities specified, or a rating agency of the Company, or employees
of such organizations or rating agency that directly participated in provision of respective
services to the Company;
 is not the owner of shares or beneficial owner of the Company's shares making up more than
1 percent of the authorized capital or a total number of the Company’s voting shares or a
market value of such batch of shares makes up over 20-fold value of annual fixed
remuneration of the member of the Company’s Supervisory Board.
II. Criteria of Membership in the Executive Board
In accordance with the Federal Law No.325-FZ “On Organized Trading” requirements for members of the
Executive Board are the following:
1. The number of members of the Executive Board is determined by the Supervisory Board and should
not be less than 5 (five) persons.
2. The members of the Executive Board are elected for a term not exceeding 3 (three) years by the
Supervisory Board upon recommendation of the Chairman of the Executive Board.
3. Members of the Executive Board of the Exchange should not be:
 persons who performed functions of the sole executive body, were a part of the collegial
executive body or performed functions of the head of the internal control service (inspector) of
financial institutions at the moment of commitment by these institutions of violations, for which
licenses of these institutions for performance of the respective types of activities were
cancelled (revoked), or violations, for which operation of the said licenses was suspended and
the said licenses were cancelled (revoked) due to the failure to correct these violations, if from
the day of such cancellation less than 3 (three) years have passed or if with respect to the said
persons there are res judicata judicial decisions establishing the facts of commission by the
said persons of the illegal acts in case of bankruptcy, deliberate and/or fictitious bankruptcy;
 persons with respect to whom the term, within which they are considered to be subject to
administrative penalty in the form of disqualification, has not expired;
 persons having criminal record for offences in the sphere of economic activities or offences
against governmental authorities;
 persons whose qualification certificate issued by the federal executive body in the sphere of
financial markets was cancelled, if from the day of such cancellation less than three years
have passed.
III. Criteria of Membership in the Derivatives Market Committee

28

DC\2654041.3
 Exhibit C(1)

The following persons may be elected to the Derivatives Market Committee:

 representatives of the professional participants of the securities market and other recipients of
services of the Moscow Exchange trading in the derivative contracts (hereinafter referred to as
the Moscow Exchange Service Recipients);
 representatives of the self-regulated organizations;
 representatives of companies included in Moscow Exchange Group (not more than 1 (one)
person);
 representatives of other organizations and independent experts, form of activities of whom
relates to the sphere of the securities market.
In accordance with the Provisions on the Derivatives Market Connittee of the Moscow Exchange:
1. the members of the Derivatives Market Committee should have qualification, knowledge and
experience necessary for fulfillment of objectives and functions of the Committee.
2. quantitative structure of the Derivatives Market Committee is determined by the Supervisory Board of
the Moscow Exchange and may not contain less than 15 (fifteen) or more than 25 (twenty five)
persons.
3. the Derivatives Market Committee should include at least 15 (fifteen) representatives of the Moscow
Exchange Service Recipients, trading volume of which in the aggregate amounts to at least 50% of
the total annual volume8 of transactions with derivative contracts concluded on the Moscow
Exchange. Number of such members of the Committee should comprise at least three fourths of the
quantitative structure of the Committee determined by resolution of the Moscow Exchange’s
Supervisory Board, but not more than one member from one representative of the service recipient
(or service recipients being a part of the Group of Companies). If the number of candidates for the
membership in the Committee nominated by the representatives of the Moscow Exchange Service
Recipients exceeds the quantitative structure of the Committee determined by the resolution of the
Supervisory Board of the Moscow Exchange, the preference is given to the representatives of the
Moscow Exchange Service Recipients, which are market makers, and then to those having the
largest trading volume in the total annual volume of transactions with derivative contracts.
4. the members of the Derivatives Market Committee are elected by the Supervisory Boardof the
Moscow Exchange annually from the candidates for election to the Derivatives Market Committee.
Nomination of candidates is performed by organizations after posting on the web-site of the Moscow
Exchange information on the beginning of acceptance of propositions from organizations on
inclusion in the list of candidates for election to the Derivatives Market Committee (hereinafter
referred to as the proposition).
5. the Executive Board of the Moscow Exchange considers the received propositions, checks the
compliance of the representatives with the requirements and forms the list of candidates for election
to the Derivatives Market Committee with consideration for regulations.
6. elected structure of the Derivatives Market Committee acts until formation by the Supervisory Board
of the Moscow Exchange newly elected at the annual General Meeting of Shareholders of the new
Committee’s structure.
7. a member of the Derivatives Market Committee at the suggestion of the Chairman of the Committee
and/or the Executive Board of the Moscow Exchange may be excluded from the Committee by the
Supervisory Board of the Moscow Exchange if he/she did not participate (which includes non-
provision of written opinions or filled out bulletins for voting on the matters under consideration) in 3
(three) and more meetings of the Committee. Such a person also may not be proposed (nominated)
to the Committee in formation of new Committee’s structure .
8. a member of the Derivatives Market Committee may lay down the duties of the member of the
Committee before the end of the term subject to notification to the Chairman of the Committee and
Chairman of the Executive Board of Moscow Exchange. A member of the Derivatives Market
Committee may also be excluded from the Committee by the Supervisory Board of the Moscow
Exchange at the suggestion of the organization that nominated the member of the Committee as its
representative. In this case such an organization may simultaneously with the suggestion to exclude
the candidate suggest a new candidate being its representative to the Committee.

8
When calculating the annual volume of concluded transactions for the purposes of these Regulations, here and in clause 3.6 of the
Regulations 12 calendar months preceeding the date of formation of the list of candidates for election to the Committee shall be
taken into account.
29

DC\2654041.3
 Exhibit C(1)

9. the membership of a Derivatives Market Committee member is considered to be terminated after

adoption by the Supervisory Board of the Moscow Exchange of a resolution on exclusion of such a
member.
10. the Chairman of the Derivatives Market Committee and, if necessary, one or more of his/her
deputies are elected by the Supervisory Board of the Moscow Exchange at the suggestion of the
executive bodies of the Moscow Exchange in accordance with their competence.
IV. Criteria of Membership in the Information Technological Services Committee
The following persons may be elected to the Information Technological Services Committee:
 representatives of technical and technological subdivisions of the Moscow Exchange, other
companies included in the Moscow Exchange Group (in coordination with the heads of the
respective companies of the Moscow Exchange Group);
 representatives of organizations being software developers;
 representatives (experts) of the leading Settlement Entities;
 representatives of the trading facilities being the representatives of Moscow Exchange in the
regions;
 representatives of other organizations and independent experts, the form of activities of which
corresponds to the objectives of the Committee.
In accordance with the Provisions on the Information Technological Services Connittee of the Moscow
Exchange:
1. the members of the Information Technological Services Committee should have qualification,
knowledge and experience necessary for fulfillment of objectives and functions of the Committee in
accordance herewith.
2. The quantitative structure of the Information Technological Services Committee is determined by the
Supervisory Board of the Moscow Exchange and may not include less than 9 (nine) or more than 25
(twenty five) persons.
3. the representatives (experts) of the Settlement Entities should comprise at least half of the
Information Technological Services Committee.
4. the number of representatives of the Moscow Exchange and companies included in Moscow
Exchange Group may not exceed 3 (three) persons, and the number of representatives of other
organizations may not exceed 1 (one) person from each organization (or organizations constituting a
Group of Companies).
5. the members of the Information Technological Services Committee are elected annually by the
Board of Directors of the Moscow Exchange from the candidates for election to the Committee, the
list of whom is formed on the basis of applications submitted to the Moscow Exchange by the
organizations after posting on the web-site of the Moscow Exchange on the Internet of information
on the beginning of acceptance of propositions on inclusion of candidates in the list for election to the
Committee (hereinafter referred to as the proposition).
6. if the candidate for election to the Information Technological Services Committee is an independent
expert, that candidate must submit to the Moscow Exchange the respective Application together with
the written consent to processing of the personal data in order to be included in the list of candidates.
7. the Moscow Exchange’s Executive Board considers the received propositions, checks the
compliance of the representatives with the requirements and forms the list of candidates for election
to the Information Technological Services Committee.
8. the elected structure of the Information Technological Services Committee acts until formation by the
Supervisory Boardof the Moscow Exchange newly elected at the annual General Meeting of
Shareholders of the new Committee’s structure .
9. a member of the Information Technological Services Committee at the suggestion of the Chairman of
the Committee and/or the Executive Board of the Moscow Exchange may be excluded from the
Committee by the Supervisory Board of the Moscow Exchange if he/she did not participate (which
includes non-provision of written opinions or filled out bulletins for voting on the matters under
consideration) in 3 (three) and more meetings of the Committee.
10. a member of the Information Technological Services Committee may lay down the duties of the
member of the Committee before the end of the term subject to notification to the Chairman of the
Committee. A member of the Committee may also be excluded from the Committee by the
30

DC\2654041.3
 Exhibit C(1)

Supervisory Board of the Moscow Exchange at the suggestion of the organization that nominated the
member of the Committee as its representative. In this case such an organization may
simultaneously with suggestion to exclude the candidate suggest a new candidate being its
representative to the Committee.
11. the membership of a Information Technological Services Committee member is considered to be
terminated after adoption by the Supervisory Board of the Moscow Exchange of a resolution on
exclusion of such a member.
12. the Chairman of the Committee is elected by the Supervisory Board of the Moscow Exchange from
the members of the Committee. At one of the first meetings of the Committee its members shall elect
by a majority of votes of the members present one or more deputies of the Chairman of the
Committee.

31

DC\2654041.3
 Exhibit C(2)

Exhibit C(2)
A description of the process by which the Foreign Board of Trade ensures that potential governing board
and committee members/other participants meet these standards.
Before a new member is elected to a committee, an initiating business department of the Moscow
Exchange will present such candidate to the Executive Board for consideration. In case of a positive
decision, the Executive Board recommends that the Supervisory Board to approve the Candidate and
include him as a member of committee. Thus, the final decision is made by the Supervisory Board.

32

DC\2654041.3
 Exhibit C(3)

Exhibit C(3)
A description of the provisions to minimize and resolve conflicts of interest with respect to membership on
the governing board and significant committees of the Foreign Board of Trade.
There is a uniform document applying to all the employees of the Moscow Exchange, persons being
members of the Executive Board, Exchange Committee and Supervisory Board, which specifies the list of
measures aimed at prevention of the conflict of interests.
To prevent conflicts of interest and mitigate negative effects thereof, if any, employees of Moscow
Exchange and members of the company’s management bodies must adhere to the following principles:
 refrain from actions and decisions that may result in a conflict of interest;
 avoid conflicts of interest and situations that may be considered as a conflict of interest;
 refrain from trades in securities, exchange-traded commodities and derivative financial
instruments9;
 refrain from combining work at the Exchange with work at companies that are concurrently trading
members (professional securities market participants) of Moscow Exchange and other stock
exchanges;
 comply with the principles of professional ethics and the Exchange’s internal documents;
 not use Exchange’s assets, confidential and inside information received while performing their
employment duties for personal purposes.

Principles for managing conflicts of interest at Moscow Exchange are as follows:

 an actual or potential conflict of interest is announced in-company;
 each conflict of interest is considered individually; risks are evaluated and measures to resolve the
conflict are taken;
 facts about a conflict of interest and its settlement are not externally disclosed;
 a balance between interest of Moscow Exchange, an employee and members of the management
bodies is remained.
Preventing and managing conflicts of interest procedures are as follows:
1. If Moscow Exchange employees or members of management bodies are in a situation that is
considered or may give rise to a conflict of interest as stated in this List, they complete a potential
conflict of interest declaration and sent it to the Internal Control Service. Such declaration must be sent
within three business days from the day on which relevant situation occurred.
2. Situations that may give rise to a conflict of interests for members of the management bodies are
considered by the Moscow Exchange’s Supervisory Board.
3. Conflicts of interest with regard to employees of Moscow Exchange are managed as follows:
3.1. If an employee is in a situation that is considered or may give rise to a conflict of interest, he/she
must promptly inform thereof his/her line manager and the Internal Control Service.
3.2. The Internal Control Service provides recommendations for the management of the conflict of
interest to the line manager.
3.3. The line manager decides what measures should be taken to manage the conflict of interest by
using the recommendations from the Internal Control Service, and communicate them to the
employee.
If the line manager disagrees with the recommendations of the Internal Control Service, the
decision is made by the chairman of the Moscow Exchange’s Executive Board.
Deals made by employees or members of the management bodies of Moscow Exchange are to
be preliminary agreed by the Internal Control Service.
4. Members of the Executive Board are permitted to participate on the management bodies of other
organizations only subject to consent of the Supervisory Board.
5. The Information Security Policy was brought into force establishing the rules of disclosure of
information in connection with the passed initial public offering of shares of Moscow Exchange (IPO).
Key provisions of the Information Security Policy are as follows:

9 Except for trades made under the trust management agreements and trades in Equity Indices and Moscow Exchange’s Shares.
33

DC\2654041.3
 Exhibit C(3)

This policy is a basic document on information security at the Moscow Exchange. It stipulates priorities,
principles and techniques for information security in circumstances creating distinctive and considerable
threats to the Company’s systems and information technologies.
The Policy describes the following points:
 definition of information security, its goals and tasks;
 principles for ensuring information security;
 order of managing information security;
 areas for development and improvement of the information security management.
The Company supports effective fulfillment of the following tasks to ensure information security:
 inventory and classification of the Moscow Exchange’s information assets;
 introduction of procedures for identifying, assessing and managing information security risks;
 creation and improvement of the information security management including valuation and analysis
of information security;
 determination and documentation of key requirements and procedures for information security;
 introduction and tuning of information protection tools;
 information security awareness training for staff of the Moscow Exchange;
 early detection and elimination of vulnerable parts of the Moscow Exchange’s assets to avoid
possible harm and troubles in the ordinary course of business that may be caused by threats
materializing to information security;
 mitigation of possible harmful effects of information security threats materialization to an admissible
level including reduction of business processes recovery time;
 information security costs budgeting and optimization.

34

DC\2654041.3
 Exhibit C(4)

Exhibit C(4)
A description of the rules with respect to the disclosure of material non-public information obtained as a
result of a member’s or other participant’s performance on the governing board or significant committee.
Members of the management bodies must sign the Confidential Disclosure Agreement prior to being
admitted to such body. The list of confidential information shall be defined by the agreement. Additionally,
the Moscow Exchange has a policy titled Rules to protect confidentiality of insider information and control
over compliance with the Federal Law No.224-FZ “On Counteracting illegal use of Inside Information and
Market Manipulation, and amending certain legislative acts of the Russian Federation and adopted in
accordance with it regulations”, which regulates:
 procedures for admittance to work with data pertaining to insider information;
 systems of control over observance of measures aimed at prevention of unlawful use of data
pertaining to insider information; and
 measures of responsibility of employees of the Moscow Exchange resulted in unlawful use of data
pertaining to insider information.

Main provisions of the obligation of confidentiality (for all employees of the Moscow Exchange):
 meet the requirements of internal documents of the Moscow Exchange governing the procedure of
information constituting a trade secret of the Moscow Exchange and the procedure for their
protection;
 use information constituting a trade secret of the Moscow Exchange and its counterparties, only for
their work on behalf of Moscow Exchange and not to use them in order to obtain benefits for himself
or on behalf of third parties;
 ensure integrity, transfer to third parties and not to disclose, without the consent of Moscow
Exchange information constituting a trade secret of the Moscow Exchange and its counterparties,
which will be entrusted to me or will be known;
 do not copy in any manner and do not make statements of documents containing trade secrets of
Moscow Exchange, except in accordance with the internal documents of the Moscow Exchange;
 do not expose the destruction and modification of information constituting a trade secret of Moscow
Exchange, without guidance of the chief;
 upon termination of the employment contract, all physical media containing information constituting a
trade secret (official documents, drafts, publications, drawings, disks, diskettes, printouts printers,
etc.), which were in my possession, give to the employee units responsible for record keeping;
 give the keys to safes and metal cases, the keys of the premises, printing, facsimile devices
identification, storage of key information to the Security Department;
 immediately inform Security Department about the loss of physical media containing information
constituting a trade secret of Moscow Exchange, the attempts to seize such information with third
parties.
Main provisions of the obligation of confidentiality (for members of the Supervisory Board, the
Moscow Exchange Council, Committees):
 use information constituting a trade secret of the Moscow Exchange and its counterparties, only for
their work on behalf of Moscow Exchange and not to use them in order to obtain benefits for himself
or on behalf of third parties;
 ensure integrity, transfer to third parties and not to disclose, without the consent of Moscow
Exchange information constituting a trade secret of the Moscow Exchange and its counterparties,
which will be entrusted to me or will be known;
 do not copy in any manner and do not make statements of documents containing trade secrets of
Moscow Exchange, except in accordance with the internal documents of the Moscow Exchange;
 when operation is stopped in the Supervisory Board of the Exchange Council, the Committee of the
Supervisory Board of the Moscow Exchange all physical media containing information constituting a
trade secret (official documents, plans, presentations, etc.) that were at my disposal, to destroy.

35

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 Exhibit C(4)

Main provisions of the Rules to protect confidentiality of insider information and control over
compliance with the Federal Law No. 224-FZ and adopted in accordance with it regulations.
Rules define the procedure for admission to work with information relating to insider information, a
system for monitoring compliance with measures aimed at preventing the misuse of information,
constituting insider information and measures the liability of Moscow Exchange for actions resulting in
misuse of information relating to insider information in the implementation of the Exchange of
professional activity.
I. Admission to work with information relating to insider information:
Admission of the Moscow Exchange's employees to work with the information relating to insider
information of the Moscow Exchange, is carried out by the Chairman of the Executive Board of the
Moscow Exchange on the basis of the Order on appointment.
Established procedures for workers' access to the work of the Moscow Exchange with information
relating to insider information.
II. Compliance monitoring system of measures aimed at preventing the misuse of information
relating to insider information.
Control over compliance with measures aimed at preventing the misuse of information relating to insider
information.
As measures to protect against unauthorized access and to prevent unauthorized use or transmission to
third parties information relating to insider information, are applied the following procedures:
 procedure of technical protection of information relating to insider information;
 restricting access of unauthorized persons to the premises of the structural units of the Moscow
Exchange;
 the procedure for allocation of access rights when entering and processing data in the course of
professional activities in order to protect against unauthorized actions of employees of the Moscow
Exchange, as well as restricting access of the workers of the Moscow Exchange to information
relating to insider information;
 procedure to protect workplaces of the Moscow Exchange's workers and storage locations of
documents containing information relating to insider information from unrestricted access,
surveillance or misuse;
 personnel management procedure Moscow Exchange;
 the procedure of interaction of structural units of the Moscow Stock Exchange together with bidders,
clearing members and issuers, as well as with other organizations for the exchange of information
in the course of professional activities.

36

DC\2654041.3
 Exhibit D-1

Exhibit D — The Automated Trading System

Exhibit D-1
Description of the following parameters of the system (accompanied by the documents, if any):
(1) The order matching/trade execution system, including a complete description of all permitted ways in
which members or other participants (or their customers) may connect to the trade matching/execution
system and the related requirements (for example, authorization agreements).
1. SPECTRA Trading System
A unique Russian technological platform SPECTRA for trading and clearing on the Moscow Exchange
Derivatives Market was launched on December 10, 2012.
SPECTRA is the first major software solution released after MICEX and RTS merged in December, 2011.
The development team incorporated the experience of the past 10 (ten) years and addressed
technological shortcomings and limitations of legacy FORTS trading system. Development of Spectra
required major architecture re-design to streamline future development and enhancements. One of the
key requirements to develop SPECTRA was full back compatibility with the existing solutions used by
brokers and their clients. The new architecture based on a modular approach with segregated trading and
clearing modules will also simplify the launch of new products. The launch of SPECTRA for the Moscow
Exchange Derivatives Market increased the trading and clearing systems' peak throughput to 52,000
transactions per second that meets global standards.
Moscow Exchange is interested in the implementation of the most advanced and innovative solutions and
services that meet international standards and make the Russian market attractive to all categories of
investors, both in Russia and abroad. A new 3.10.3. version of SPECTRA trading system was launched in
November 2014.
The main features of SPECTRA:
a) SPECTRA is the Moscow Exchange in-house system that is used both for clearing and trading
purposes. All transactions with orders are conducted within one system (adding, deleting and changing):
the SPECTRA trading system. As soon as an order is placed, it can be matched with the other order and
the executed trade cannot be cancelled or changed.
b) SPECTRA Trading System is a modern modular multi-tier application based on a Microsoft Windows
platform. It implements core trading functionality, such as order matching, market data dissemination, pre-
trade risk management and user access support.
c) Client access to the SPECTRA trading system is enabled through the industry-standard FIX and FAST
protocols, affording rapid and straightforward integration with vendors’ and brokers’ technology and
operations, such as order management systems, execution management systems, order routers and
algorithmic applications. In addition, the SPECTRA trading system exposes an endpoint of its internal fast
data exchange bus (known as Plaza II), which furnishes a very low-latency/high-performance connectivity
path demanded by sophisticated electronic trading applications.
 end-to-end latency: less then 1 millisecond from the equipment collocated with SPECTRA
installation
 matching engine capacity: more than 50,000 orders/second
 market data dissemination latency: once in 1 millisecond with less than 0,05 millisecond latency on
collocation
2. Connectivity and Trading services
1. Network connectivity
a) Co-location
Co-location services or equipment installation at the Moscow Exchange Data Centers (DC) offer the
lowest-latency access to the Exchange markets by ensuring the reliability, accessibility, and security of
client connections. Clients are able to set up their applications in the data center with the closest proximity
to the Moscow Exchange trading platform, which thereby provides the best latency for order execution
and the fastest data feed. Co-location services are available for participants, their clients, market data
providers, software providers. They are therefore available for the whole community of users who are
interested in the high speed of access to the markets of Moscow Exchange.
b) Moscow Exchange Point of Presence (PoP):

37

DC\2654041.3
 Exhibit D-1

Moscow Exchange provides the functional for order routing and market data streaming capabilities
through FIX and FAST UDP multicast interfaces. Following the global trends, Moscow Exchange has
extended its infrastructure and the range of market data distribution and trading services. Moscow
Exchange members can take advantage of the market access using The Exchange Point of Presence
in Equinix LD4.
Equinix LD4 is a commercial data center in Slough, UK (in close proximity to London) owned by Equinix,
Inc.. LD4 data center is built in accordance with international ВС standards and currently accommodates
equipment and connectivity pools from majority of global financial institutions, brokers and exchanges.
Furthermore, according to its IT strategy the Moscow Exchange plans to further expand its Point of
Presence geography during 2015-2016 to London, Frankfurt, New York, Chicago, Tokyo.
c) ConnectME solution
ConnectME is a fully customized solution designed as a direct point-to-point connection with individual
parameters between the client facility and the Exchange infrastructure. The solution provides a safe and
fail-tolerant route fully monitored and managed by the Exchange professionals.
 single point of entry to all Moscow Exchange’s markets.
 "point-to-point" connection through wide range of network operators (operator must be pre-
approved by the Moscow Exchange).
 flexibly configurable and low latency optimized solution to meet specific client requirements.
 support of copper or fiber channels.
 redundant and secure connection managed by the Moscow Exchange.
d) Universal scheme for Exchange markets access
Unified scheme basically means that the Moscow Exchange provides access to all markets through a
single point of connectivity. All available market access protocols (native API or FIX/FAST) are supported.
This solution is called “Unified connectivity scheme”.
e) Internet connection
The Moscow Exchange uses the encrypted connection over the Internet. The solution utilizes
3DES/SHA protocols.
f) Extranet
The Moscow Exchange is accessible through global financial networks (providers) such as SFTI, TMX
Atrium, BT Radianz; and more are coming. The connectivity supports industrial standard FIX/FAST
protocols allowing clients to easily scale their globally distributed systems.
2. Access Interfaces and Software.
a) Access interfaces (native API or FIX/FAST):
 Native API (PlazaII)
 FIX
 FAST (UDP multicast market data)
b) Exchange Terminal – FORTS Terminal
FORTS Terminal software supports the standard functionality over PlazaII API interface with configurable
access level (Trade or View access). Key features:
 standard trading and analytic application;
 real time and historical market data;
 analytic tool set.
Currently about 20 software vendors are certified on the Moscow Exchange Derivatives Market; the list
includes such well-known names as QUIK, CQG, Sungard, Orc Software, Bloomberg, Reuters, Gatelab
and others.
3. Technology
1. Market access services overview

38

DC\2654041.3
 Exhibit D-1

2. Key technology service offering

 Connectivity solutions through domestic and global Network Service Providers and Point of
Presence in the UK
 FIX, FAST and proprietary APIs for trade execution and market data delivery
 Accessibility through Independent Software Vendors and trading networks
 Bloomberg, Reuters, Fidessa, Sungard, CQG, etc.
 Comprehensive exchange co-location with variable footprint sizing options
 Certification and testing environment services for new client/vendor technologies
3. DMA & SMA to the Moscow Exchange
Both DMA is available for Market Participants and their clients. SMA will be available in 2015.
Direct access to the Moscow Exchange markets gives the Trading Participant’s clients the ability to
connect to the trading and clearing system without becoming Trading Participants themselves. The clients
receive real time market data and submit orders electronically to the Moscow Exchange engines through
the Trading Participant’s infrastructure (including risk management controls of the Trading Participant).
4. Standard connectivity, FIX & FAST
The Moscow Exchange provides both standard FIX/FAST interfaces and specialized APIs for direct
access to all markets.
FIX standard access
The Moscow Exchange FIX gateways provide low-latency direct access to all Moscow Exchange markets
and offer FIX 4.4 order management capabilities. The FIX Gateway was developed in partnership with
Exchange clients to be one of the most universal trading solution which is also available through the Point
of Presence in the UK (LD4). The Moscow Exchange has been providing FIX on-boarding services to
clients for over 5 (five) years and currently our experts continue to deliver quality services to Trading
Participants.
FAST Market Data streaming
UDP multicast service provides real time market data from all Moscow Exchange markets. With reliable,
consolidated data streaming service the subscribers take advantage of receiving financial information
based on international delivery standards from largest Russian markets.
Key features include:
 Direct market data feed with highly efficient message distribution capabilities
 Data feeds are available from Equity, FX and Derivatives markets.
39

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 Exhibit D-1

 Low latency and ultimate performance

 FAST compression and UDP Multicast delivery
 High performance recovery methods.
(2) The architecture of the systems, including hardware and distribution network, as well as any pre- and
post-trade risk-management controls that are made available to system users.
1. SPECTRA Trading System Architecture
 modular architecture
 effective realization of algorithms on the basis of specific data structures
 pipeline order processing in the system modules

Pipeline processing:
 order from one module proceeds to the entry of the other module
 processing of the order immediately upon receipt, no waiting for reply
 parallel execution of different processing stages
In order to access the terminal or API, a Trading Participant sends a request via the Electronic Data
Interchange System (EDI) to the NCC/Moscow Exchange to register a certain username. The Moscow
Exchange generates a password and provides it to the Trading Participant via the EDI as well. One
username has one password. Each time a Trading Participant needs a new password it must send a
request to the NCC/Moscow Exchange to create a new password.
All data provided by the Moscow Exchange is strictly segregated in accordance with the clearing register
assigned to certain Trading Participant. The username provided to each Trading Participant is tied with
the clearing register that was assigned to such participant.

Each username has a certain set of rights that shall be established at the moment of sending us a
request. One username is considered to be for one user only until it is transferred to another user by the
first user.

40

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 Exhibit D-1

2. Risk Management System

The Moscow Exchange imposes a prefunding requirement: each member has to have sufficient funds
deposited in the clearing register prior to trade execution. Once an order is placed the minimum required
collateral is blocked from the funds. If the amount of funds on deposit is insufficient, the order is duly
rejected. Insufficiency of collateral upon mark-to-market procedure leads to a margin call. When the
minimum collateral requirement is reduced, then the free funds will be increased by the released amount.
Collateral sufficiency is consequently verified in real time at different levels: at client level, at brokerage
level and at Clearing Member’s level. In addition to that, the order price is confirmed to be inside the price
deviation limits set for a particular trading instrument. In case there are different price deviation limits set
by the Clearing Member or Trading Participant for certain clients, then the order is also verified against
these limits. If one of those checks failed the order is overruled.
3. SPECTRA Trading System’s security features
To control a lawful system access 2 (two) verification criteria are employed. First, IP’s control is
performed. This denies connections to the internal services from anywhere but the internal network.
Second, a login (User ID) and password are asked for different domains. Each user is uniquely identified
by his/her User ID.
To ensure cryptic password strength minimum mandatory standards are imposed. These consist of
requirements for length, complexity and inconspicuousness (e.g., user ID is inimitable, mandatory use of
alphanumeric and special characters, etc.) During the log-in process passwords are not visible on the
screen and cryptically protected. The activities during user access are saved in the logs to ensure that the
following information is kept a record of: IP address, time in/out, User ID/password.
To guarantee that the confidential information remains secure during remote connectivity session
encryption and VPN technology are deployed. All communications within the local network are protected.
All communications via Internet or leased lines must have a secure VPN connection or Digital Signature
Algorithm. Back up procedures for all critical data are performed daily. To protect data from unauthorized
41

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 Exhibit D-1

access hardware and software firewall are installed. Moreover, in case of any dangers or security threats
there is an action plan in place to prevent the hazard or contain potential damages.
The production segment is also protected by hardware firewalls (Cisco), software firewalls (access lists),
as well as full-coverage monitoring system and back-up procedures.
Physical access to the system is controlled by the use of card access control system. Administrative
workstations/terminals are protected by:
 anti-virus and anti-spam mailing filters;
 anti-virus incoming internet traffic filters;
 anti-virus software on workstations/terminal;
 content-based internet filters
The Moscow Exchange has confidential back-up and recovery procedures in cases of virus attack or
some other harm or damage. The in-house monitoring system uses SNMP protocol and native protocol
(PlazaII) to obtain and store measures from different points of system (hardware and software) every
minute.
4. Time length the system is in operation.
The Moscow Exchange Trading System is in use since 2002 and continues to be evolved.
5. Any significant system failures or interruptions.
As an open joint stock company, the Moscow Exchange discloses all information on significant failures in
the trading systems and service interruption, including in the Derivatives Market, on its website.
On the Moscow Exchange Derivatives Market the following service interruptions were registered:
 December 12, 2011 – trading halt for 3 hours 45 minutes;
 May 8, 2012 — delay in beginning of trading for 30 minutes;
 January 25, 2013 — delay in beginning of the evening session for 30 minutes;
 November 13, 2013 - trading halt for an hour;
 April 17, 2014 – trading halt lasting 46 minutes;
 June 26, 2014 – one server went offline temporarily, which affected some Trading Participants’
connection to the Exchange (it was restored within 12 minutes);
 October 14, 2014 – trading halt for 1 hour 16 minutes due to incorrect transaction’s processing by
the core, which caused the error in the server exchange information disclosure;
 October 15, 2014 – trading halt lasting 35 minutes due to incorrect calculation of Trading
Participants’ positions.
No significant failures were registered.
6. The nature of any technical review of the order matching/trade execution system performed
by the foreign board of trade, the home country regulator, or a third party.
Overall diagnostic of IT processes and mission critical systems is conducted by independent auditor once
every two years. The entire business of the Moscow Exchange and Clearing House are audited twice a
year. We require certain reports from Clearing Members, which are stored both as electronic files and
paper copies for the length of at least 10 (ten) years.
7. Derivatives Market Timetable (Trading and Clearing Hours).
10:00 — 14:00 the beginning of the main trading session
14:00 — 14:03 day clearing session
14:03 — 18:45 the end of the main trading session
18:45 — 19:00 evening clearing session
19:00 — 23:50 evening trading session

42

DC\2654041.3
 Exhibit D-1

8. Types and duration of orders accepted

All orders are addressed to the Central Counterparty — NCC.
Kinds of orders:
 Directed: an order between two specific counterparties; both the buyer and the seller must send
orders to buy and sell, respectively, indicating each other as counterparties of the trade; the order is
not visible to all market participants. Terms of the trade may be agreed upon by the two
counterparties beforehand.
 Undirected: an order sent anonymously into the order book, visible to and actionable by any market
participant.
Types of orders:
 to buy
 to sell
Categories of orders (filling of order is permissible only with indication of the price):
 Limited order: an order to buy or to sell a derivative at a specified price or better with partial
execution. Unexecuted part of the order remains in the queue as a separate active limit order with
preservation of the time parameters of its initial placing to the queue of active orders;
 Immediate-Or-Cancel order: executed at the moment of announcement at the price specified in the
order or at a better price within the scope of the order (if the scope of the order is less than or equal
to the aggregate scope of the counter active orders with the price not worse than the price specified
in the order) or within the scope of the specified active orders (if the scope of the order exceeds the
scope of the specified active orders). Unexecuted part of the order is immediately deleted by the
Moscow Exchange from the trading system;
 Fill-Or-Kill order: executed at the moment of announcement at the price specified in the order or at a
better price within the scope of the order. If the order cannot be executed in full it is immediately
deleted by the Moscow Exchange from the trading system.
Term of validity of the order:
1. An active order is deleted by the Moscow Exchange from the trading system after the end of the
evening clearing session, provided that at least one of the following conditions is fulfilled:
 admission of the settlement entity to conclusion of this derivative contract ceased (in cases
prescribed by the Moscow Echange’s Rules of executing derivatives trades on the Derivatives
43

DC\2654041.3
 Exhibit D-1

Market and by the NCC’s Clearing Rules on the Derivatives Market (the Derivatives Rules and
the Clearing Rules));
 price of the futures contract indicated in this active order for purchase exceeds the upper limit
of price fluctuations or the price of the futures contract indicated in this active order for sale is
lower than the lower limit of price fluctuations of this futures contract;
 execution of this active order will result in exceeding of limits of open positions, subject to their
determination with respect to the Settlement Entity in accordance with Derivatives Rules and
Clearing Rules;
 receipt by the Moscow Exchange from the Clearing Center of the notification of the necessity
to delete the active order in cases specified by the Clearing Rules.
2. In case of suspension of trading, the Moscow Exchange provides the Settlement Entities with the
opportunity to withdraw active orders until resuming of trading.
3. After the end of the main trading session of the current trading day the Moscow Exchange deletes
from the trading system all active orders that do not indicate their expiration date.
4. After the end of the evening additional trading session of the current trading day the Moscow
Exchange deletes from the trading system all active orders with the expiration date preceding the
date of the current trading day.
5. After the end of the main trading session of the current trading day, which is the last day for
conclusion of this derivative contract, the Moscow Exchange deletes from the trading system all
active orders with the expiration date:
 if the date indicated in the order coincides with the date of the trading day, which is the last
day for conclusion of the derivative contract indicated in the order — after the end of the main
trading session of the trading day, which is the last day for conclusion of this derivative
contract;
 if the date indicated in the order fall on a day after the date of the trading day, which is the last
day for conclusion of the derivative contract indicated in the order — after the end of the main
trading session of the trading day, which is the last day for conclusion of this derivative
contract.
9. Information that must be included on orders.
Orders filed by the trader to the trading system must contain the following information:
1. Order for conclusion of futures contracts:
 kind of the order (directed/undirected);
 code of the Trading Participant that submitted the order;
 code of the Trading Participant, to which the order is addressed (in case of directed order);
 code of the Trading Participant’s Client, for or on behalf of which the order is submitted (code
of the position register section);
 code (designation) of the futures contract;
 type of order (buy or sell);
 price;
 number of offers for conclusion of the futures contracts (scope of offer).
2. Order for conclusion of options contracts:
 kind of the order (directed/undirected);
 code of the Trading Participant that submitted the order;
 code of the Trading Participant, to which the order is addressed (in case of directed order);
 code of the Trading Participant’s Client, for or on behalf of which the order is submitted (code
of the position register section);
 code (designation) of the options contract;
 type of order (buy or sell);
 size of premium;
 number of offers for conclusion of the options contracts (scope of offer).
3. Order submitted to the trading system may also contain the expiration date of the order. In this
case the term of validity of the order expires:

44

DC\2654041.3
 Exhibit D-1

 if the date indicated in the order falls on a day before the date of the trading day, which is the
last day for conclusion of the derivative contract indicated in the order — after the end of the
evening trading session of the trading day, the date of which follows the date indicated in the
order;
 if the date indicated in the order coincides with the date of the trading day, which is the last
day for conclusion of the derivative contract indicated in the order — after the end of the main
trading session of the trading day, which is the last day for conclusion of this derivative
contract;
 if the date indicated in the order falls on a day after the date of the trading day, which is the
last day for conclusion of the derivative contract indicated in the order — after the end of the
main trading session of the trading day, which is the last day for conclusion of this derivative
contract.
4. Orders submitted to the trading system should contain category indication.
10. Trade confirmation and error trade procedures
The Moscow Exchange fines Clearing Memebers for erroneous or ineffective transactions, and may
impose limits on trading capability (see Transaction Fees). In the case that a certain threshold is
breached, the Moscow Exchange reserves the right to restrict the login’s trading rights for the remainder
of the trading session.
Derivatives trades are executed as a result of the NCC’s accepting the offers that it received as a result of
announcing the orders that contain these offers to enter into a derivatives contract.
The NCC shall accept the offers provided that these offers comply with the Derivatives Rules, Clearing
Rules and Specifications. Upon order placement by the Trading Participant, the Moscow Exchange shall
send the information on the placed order to the NCC via the Trading System. Upon receipt of the
information on the placed order for conclusion of the Derivatives Contracts, the NCC shall immediately
check the possibility to declare the order. The NCC shall calculate the Trading Limit for the Clearing
Member to control the possibility to declare the order10. In case of the positive result of the check, the
NCC shall send the confirmation of the possibility to declare the order to the Moscow Exchange via the
Trading System, in case of the negative result – refusal of declaration of the order.
The Exchange shall register orders submitted by traders in the Registry of the Orders (i.e. such orders
are considered declared) except in the cases described below:
 the order does not contain at least one of the terms determined in accordance with the Trading rules;
 it is a limit or market order that does not allow for partial execution and leads to a cross trade;
 the trading participant is not admitted to execution of trades in the given derivatives contract;
 the futures price/ spread size specified in the order is above the upper price fluctuation limit /spread
size or below the lower price fluctuation limit/spread size for the given futures contract;
 the NCC sends a refusal of declaration the order to the Moscow Exchange in cases described in the
Clearing Rules11;
 the order has been submitted violating admission limitations set with regard to the Clearing Member;
 the order has been submitted violating other limitation.
It shall be deemed that the NCC receives offers that constitute orders at the moment when such orders
are declared.
The NCC shall only accept an offer to enter into a derivatives contract provided that there is an opposite
active order that is the best buy order or the best sell order accordingly.
Upon execution of the derivatives trades the price/premium is considered to be equal to the
price/premium indicated in the counter active order announced earlier, and the number of concluded
derivative contracts is considered to be equal to the smaller of the number of offers contained in the
counter active orders.
All derivatives trades executed on the basis of active orders submitted by a trader shall be deemed to be
executed in the name of the Clearing Member. If a derivatives trade is executed based on an order that
indicates the code of a positions register section that is mentioned in a market maker agreement it shall

10 For more information – see Article 22 of the NCC's Clearing Rules.

11 See Article 22.3 on the NCC’s Clearing Rules
45

DC\2654041.3
 Exhibit D-1

be deemed that such derivatives trade is executed by a Trading Participant in order to perform its market
maker’s obligations.
The Moscow Exchange shall register all derivatives trades executed during a trading day in the Registry
of Trades.
After the trade is executed, the terms of a transaction may not be changed or rejected.
After the end of the trading day, all Clearing Members receive via AWS (automated workstation
connected to Moscow Exchange’s Trading System) the information on all derivatives trades registered
during the trading day (designation of the derivatives contract, scope of the derivatives trades, price
(premium), time of registration of the derivatives trades).
11. Anonymity of participants
Orders that are disclosed to all Trading Participants are considered to be undirect orders. All the other
orders are considered to be direct orders. The information on the participant that filed the undirect orders
is available only to the NCC as a central counterparty.
12. Trading system connectivity with clearing system.
The Moscow Exchange has an in-house system that is used both for clearing and trading purposes. As
there is no segregation of membership for Clearing Members and Trading Participants, all transactions
are done within one system (adding, deleting, and changing).
A Clearing Member may send an application to transfer, withdraw funds, to register new clients, clearing
registers. These applications are sent via the EDI System (Electronic Data Interchange System with
electronic signature).
13. Response time
Current market data latency is less then 1 millisecond from the equipment collocated with SPECTRA
installation
14. Ability to determine depth of market
The order book displays consolidated orders and provides depths of market of 5, 20, or 50 levels. In the
order log, however, market participants may see the full, unconsolidated depth of market.

Statistics on the trading on the Derivatives market:

1. Open Interest (OI) at the end of the Q3 of 2014

OI at the end of the Q3 of 2014
Total outstanding
Total futures Total options RTS Index futures USD/RUB futures
OI
USD 7,6 bln 3,9 bln 1,5 bln 4,4 bln 11,5 bln
Contracts 9,7 mln 2,7 mln 671,6 thsd 4,3 mln 12,4 mln

2. The trading volume in recent years:

Value of trading
2012 2013 3th quarter of 2014

Average daily turnover, USD 6,3 bln 6,1 bln 5,5 bln
Average daily turnover, contracts 4,2 mln 4,5 mln 4,9 mln

Open positions (end of the year, USD) 10,8 bln 11,9 bln 11,5 bln
Open positions
9,4 mln 10,5 mln 12,5 mln
(end of the year, contracts)

3. The 3 most liquid contracts:

2013 3th 2014
Contract
Rating Average daily trading volume Average daily trading volume

46

DC\2654041.3
 Exhibit D-1

USD Contracts USD Contracts

RTS Index Futures 1 2,9 bln 1,0 mln 2,1 bln 872,5 thsd
Futures on
USD/RUB exchange 2 1,5 bln 1,5 mln 2,3 bln 2,3 mln
rate
Option on RTS
Index Futures 3 473,5 mln 168,9 ths 322,7 mln 131,3 thsd
Contract

4. Statistics by groups of instruments traded on the Derivatives Market:

Share of Derivatives' Trading Volume by groups as of September

2014, USD
Bonds

Currency

41% 0%
Indices

Shares 5%
2% 2%
0%
Short term
Interest Rates
52%
Сommodities

5. Derivatives Market volumes and OI

Average daily trading volume and OI, bn. USD
12 18

16
10
14
Volume,
8 12 USD
10
6 OI, USD
8

4 6

4
2
2

0 0
1-Jan-09

1-Jan-10

1-Jan-11

1-Jan-12

1-Jan-13

1-Jan-14
1-Sep-09

1-Sep-10

1-Sep-11

1-Sep-12

1-Sep-13

1-Sep-14
1-May-14
1-May-09

1-May-10

1-May-11

1-May-12

1-May-13

6. RTS index futures volume (USD), bln.

47

DC\2654041.3
 Exhibit D-1

Value of trading, USD

180
160
140
120
100
80
60
40
20
0
30-Jan-09 30-Jan-10 30-Jan-11 30-Jan-12 30-Jan-13 30-Jan-14

7. RTS index futures OI(USD), bln.

OI average daily, USD

4
3.5
3
2.5
2
1.5
1
0.5
0
30-Jan-09 30-Jan-10 30-Jan-11 30-Jan-12 30-Jan-13 30-Jan-14

8. USD/RUB Volume(USD), bln.

Value of trading, USD
70
60
50
40
30
20
10
0
30-Jan-09 30-Jan-10 30-Jan-11 30-Jan-12 30-Jan-13 30-Jan-14

9. USD/RUB OI (USD), bln.

48

DC\2654041.3
 Exhibit D-1

OI average daily, USD

6

0
30-Jan-09 30-Jan-10 30-Jan-11 30-Jan-12 30-Jan-13 30-Jan-14

10. Share of non-residents (%)

50.00
45.00
40.00
35.00
30.00
25.00 2013
20.00 2014
15.00
10.00
5.00
0.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

15. Market continuity provisions.

In case of a significant disaster, key staff will be relocated to an alternative location. Depending on the
nature of the event, the crisis management team could consider relocation to one of our three locations,
which have all necessary equipment to continue our operations. These locations are in 700m, 6km and
16km from the main location. In case of major incident with our main data center, we will switch over to
our recovery data center. Moscow Exchange operates 3 main sites (office), two of them have WAR seats
in them with installed equipment (with required hardware, software, security policies, network equipment,
etc). WAR seats are available 24/7 and could be engaged immediately after employees get there from
impacted site. Office sites and datacenters are geographically distributed.
Switching to the backup center can be performed in 2 (two) ways:
 in automatic way – using a number of different industrial technologies, the Moscow Exchange can
switch to the backup center using an automatic switch. As an example - a condition to automatically
switch to the recovery center is the lack of response from the center of the main equipment in a
given amount of time.
 in a manual way – this switch is performed by the duty engineers of the Moscow Exchange, which
are at work an hour before the start of the trading day until the completion of all procedures at the
end of the trading day. The decision to switch is made by an engineer, and it is also possible to
address the committee on emergency situations.
As an example, the failure of air-conditioning in the main data center does not cause immediate failure of
equipment and systems, but the engineer on duty is not in a position to make his own decisions about
switching, so the committee on emergency situations would make a decision. At the same time, a

49

DC\2654041.3
 Exhibit D-1

message monitoring system that the primary database starts to run slower can serve as a unique
indicator of the engineer to carry out switching.
16. Reporting and recordkeeping requirements.
The Moscow Exchange keeps all data and materials since the very beginning of Moscow Exchange. In
accordance with the Regulations No.*** “On Trading Organization Activity”, the Moscow Exchange must
ensure storage and protection of all information connected with the organization of trade, including by
way of creation of its back-up copy and determination of procedures aimed at prevention of malfunction
and errors. Archives are retained permanently.
The Moscow Exchange’s registers are maintained in electronic form or in hard copy and electronic form.
Registers must allow compiling lists and extracts from them as of any date and over any period. The
Moscow Exchange must provide for additional measures of protection of all information on activities of the
Exchange, which is not subject to disclosure in accordance with the legislation of the Russian Federation
and regulatory legal acts of the Bank of Russia, or information subject to disclosure up to the moment of
its disclosure by the Exchange (proprietary information).
Internal documents of the Moscow Exchange that provide for the procedure for storage and protection of
the proprietary information must provide particularly for:
• rules of processing and mode of access to proprietary information;
• protection of proprietary information against unauthorized access; and
• use of passwords and other means restricting the access to proprietary information, including to data
bases of the Exchange.

50

DC\2654041.3
 Exhibit D-2

Exhibit D-2
A description of the manner in which the Foreign Board of Trade assures the following with respect to
the trading system, separately labeling each description:
The Moscow Exchange algorithm ensures that trades are matched fairly and timely in several ways.
Trading is conducted in the form of Continuous Double Auction (CDA) for anonymous orders and with
matching of counterparties for address orders. Buy and sell orders are matched based on price and time
priorities. However, order price priority takes precedence over order time priority: an order that was
placed later into the queue but with a better price will take precedence over another order which entered
the queue earlier; in the case that prices of two orders are the same, the order that was placed earlier
will be executed first. A trade executes according to all the instructions specified in the order, and with
the full consent of all counterparties involved.
Matching of orders is performed according to the following priorities:
a) For direct orders it is required to indicate in these orders the respective Settlement Entities, the orders
of which may be counter; i.e. the order may be accepted only by that participant, the code of which is
indicated in the order. At the end of the main trading session of the current trading day all active orders
are deleted from the trading system, which do not indicate the date of their expiration.
b) When matching the orders in the undirect mode the following priority mode applies:
 By price — in the first instance: order with the best price is accepted in the first instance.
 By time — in the second instance: in case of coincidence of prices of orders the order filed
earlier is accepted in the first place.
When executing a derivatives trade, price/premium is deemed to be equal to the price/premium
indicated in the counter active order announced earlier, and number of concluded derivative contracts is
considered to be equal to the smaller of the number of offers contained in the counter active orders.
(1) IOSCO Principles. The trading system complies with the Principles for the Oversight of Screen-
Based Trading Systems for Derivative Products developed by the Technical Committee of the
International Organization of Securities Commissions (IOSCO Principles). Provide a copy of any
independent certification received or self-certification performed and identify any system deficiencies
with respect to the IOSCO Principles.
The Moscow Exchange is not certified for compliance with IOSCO Principles because this standard is
not currently applied within the Russian Federation. However, the examination of this standard showed
that certification is possible as the Moscow Exchange complies with these principles.
Principle 1. [Applicable Regulatory Standards]
The system sponsor should be able to demonstrate to the relevant regulatory authorities that the
system meets and continues to meet applicable legal standards, regulatory policies, and/or
market custom or practice where relevant.
Fundamental Federal Laws regulating the activities of the organizer of trading are 39-FZ “On Securities
Market” and 325-FZ “On Organized Trading”. An organizer of trading must comply with the license
requirements established by the Bank of Russia. The Bank of Russia controls and supervises over
activities of the organizers of trading. If an organizer of trading repeatedly breaches provisions stipulated
by the Federal Laws of the Russian Federation and regulatory legal acts adopted in accordance
therewith or fails to fulfill instructions of the regulatory authority, the Bank of Russia may revoke the
license.
Principle 2. [Transparency]
The system should be designed to ensure the equitable availability of accurate and timely trade
and quotation information to all system participants and the system sponsor should be able to
describe to the relevant regulatory authorities the processing, prioritization and display of
quotation within the system.
Information regarding a participant’s orders, executed transactions and quotations become available to
the participant within 3 milliseconds after sending a transaction, and via Internet — up to 15 milliseconds
and more depending on the Internet-provider. The information on trading (orders and transactions of the
Settlement Entities) is transmitted on-line in the Bank of Russia through the monitoring system installed
at the Moscow Exchange.

51

DC\2654041.3
 Exhibit D-2

Principle 3. [Order Execution Algorithm]

The system sponsor should be able to describe to the relevant regulatory authorities the order
execution algorithm used by the system, i.e., the set of rules governing the processing, including
prioritization and execution of orders.
Moscow Exchange has internal document titled the Derivatives Rules, which specifies the conditions
and procedure for trading on the derivatives market, as well as the procedure for control over the
executed transactions, including:
• procedure and time of holding of trading;
• procedure for filing, registration and processing of orders of Settlement Entities;
• procedure for execution derivatives trades;
• list of information provided by the Moscow Exchange to the Settlement Entities in the course of
trading;
• procedure for suspension, termination and resumption of trading;
• activities upon occurrence of exceptional circumstances.
The Derivatives Rules are approved by the Executive Board of Moscow Exchange and sent for official
registration with Bank of Russiaprior to entry into legal force.
Principle 4. [Operational Issues]
From the technical perspective the system should be designed to operate in a manner, which is
equitable to all market participants and any differences in treatment among classes of
participants should be identified and explained.
Unified order matching algorithm applied on the Moscow Exchange is embedded in the kernel of the
trading system and is universal for all market participants authorized to execute transactions with
specific financial instruments. Powers and access to trading in particular instruments are defined by the
Regulations on Admission to trading. The Regulations on Admission to trading specify categories of
membership and requirements to each category of membership. Opportunities of the market participant
(set of available operations) are indicated in a certain way in the trading system and controlled by the
trading system.
Principle 5. [System Vulnerability]
Before implementation and on a regular basis thereafter, the system and system interfaces
should be subject to the objective risk assessment to identify vulnerabilities (e.g., the risk of
unauthorized access, internal failures, human errors, attacks, capacity and natural
catastrophes), which may exist in the system design, development or implementation.
According to the regulatory legal act of the Bank of Russia, an organizer of trading is obliged to perform
tests of the system and disclose the performance results of those tests no later than 3 (three) trading
days after carrying out of such tests. The Moscow Exchange performs testing by way of imitation of the
technical conditions, under which the actual trading is carried out, and if necessary — by way of carrying
out of the test operation. The IT Committee performs these tests.
The primary objectives of the IT Committee are:
• preparation of recommendations on interaction with the companies of Moscow Exchange Group,
professional participants of the financial market being Settlement Entities on Exchange, as well as
with the companies being software developers on the questions of development of information
technologies applied by the Moscow Exchange;
• provision of full and comprehensive consideration of needs of the professional participants of the
financial market being Settlement Entities in the sphere of development and support of the trading
system of the Moscow Exchange;
• participation in the test work (testing) of the facilities for holding of trading being implemented
(updated); and
• preparation of recommendations for possible modernization of the facilities for holding of trading.
Prior to the implementation of any update of the trading system, the IT Committee carries out a complex
testing, reports on which are published on the web-site of the Moscow Exchange.
At least once every 2 (two) years, the Moscow Exchange conducts an audit of the basic processes of
development, testing and operation of the facilities for holding of trading, including analysis and
assessment of risks of accessibility and integrity of data, as well as of other risks connected with the
52

DC\2654041.3
 Exhibit D-2

operation processes necessary for ensuring the holding of trading, with the participation of independent
consultants. The report on the conducted audit is submitted to the Bank of Russia within 10 (ten)
working days from the date of its receipt by the stock exchange.
Principle 6. [Standards of System Access]
Procedures should be established to ensure the competence, integrity and authority of system
users, to ensure that system users are adequately supervised, and that access to the system is
not arbitrarily or discriminatorily denied.
Access to the trading system is provided only to the Trading Participants. In order to connect to the
trading system the trader should pass the authorization using unique registration data (username,
password). In order to register as a Settlement Entity, a person or entity must comply with specific
requirements established by the Moscow Exchange in the Regulations on Admission to trading. (See
Exhibit B-2 to the FBOT Application).
Principle 7. [Financial Integrity]
The relevant regulatory authorities and the system sponsor should consider any additional risk
management exposures pertinent to the system, including those arising out from interaction
with related financial systems.
Clearing Member may send an application to transfer, withdraw funds, to register new clients, clearing
registers. These applications are sent via the EDI System (Electronic Data Interchange System with
electronic signature). If the application relates to cash funds movement outside of the NCC’s account,
NCC sends a request to National Settlement Depository (NSD). If the application relates to funds
movement within the account, NCC makes internal accounting transaction. If the request concerns
securities, NCC contacts NSD in accordance with the rules (See Appendix 3 to Supplement S-1).
The NCC developed measures to protect the funds of clients; these measures include the risk
management system, procedure for use of guarantee funds, possibility of separated storage of the
client’s funds (segregated accounts), etc. For more information, see clause “vii” of Exhibit E (3) to
Supplement S-1 to the FBOT Application (Information on the clearing agency).
Principle 8. [Surveillance]
There should be mechanisms in place to ensure that the information necessary to conduct
adequate surveillance of the system for supervisory and enforcement purposes is available to
the system sponsor and the relevant regulatory authorities on a timely basis.
There are mechanisms and resources on the Moscow Exchange ensuring the verification of reliability
and continuity of the system, together with the established procedures and internal regulations for
notification of responsible persons (management of the Moscow Exchange). In accordance with the
Regulations No.*** “On Trading Organization Activity”, the Moscow Exchange is obliged to submit
notifications to the Bank of Russiain cases of malfunction that result in the breach of the order of holding
of trading and access of participants to trading. The Moscow Exchange should also disclose information
regarding any detected malfunctions on its web-site or in another suitable manner.
To assure surveillance functions the regulator gets real-time online trading information from the
Exchange at the terminal unit installed at the regulator’s premises. This includes information about the
orders submitted by Trading Participants, as well as on the trades executed during trading conducted by
the Organiser of Trading.
According to the clause 33 of Regulations “On Trading Organization Activity”, the following additional
information shall be received as electronic files at the remote terminal unit installed at the regulator’s
premises no later than 12:00 local time of the next trading day:
 information about the submitted orders containing the identification number of the order, unique
order’s code (that can be same identification number of the order), the Trading Participant Code,
Trading Participant’s Client Code, Clearing Broker Code (if the order submitted with such
indication), type of the order, terms and conditions of the order, date and time of order registration,
date and time of order execution (withdrawal), the result of submitting the order (executed, partly
executed, withdrawn, revoked, etc.), the reason of revocation of the order. Indication of the country
code of the Trading Partcipant’s Client is mandatory.
 information about the executed trades containing the standard conditions of trades (except for the
price, categories (types), series of securities), identification numbers of the orders, on the basis of
which the transaction was conducted; identification number of the trade, date and time of trade
registration, codes of the Trading Participant that conducted the trade, codes of the Trading
Participant’ Clients for or behulf of which the trades were conducted; the title (code) of financial
53

DC\2654041.3
 Exhibit D-2

instrument (type of contract and the object of a contract); if the financial instrument is a security –
the issuer’s title, type, category and series of the financial instrument being the subject of the trade;
the price of a single financial instrument; the number of financial instruments, including the number
of instruments per each client in case the trade was executed following the orders or in the interests
of several clients; amount of the trade;
 information about the results of trading with securities, REPO contracts, FX-instruments,
commodities for the trading day, containing information as described in clause 33.3. of these
Regulations;
 information about the results of trading with derivatives contracts for each specification of the
derivatives, in the context of terms setted for fulfillment of obligations under those contracts, and
also information about the strike (for options). Such information should include information about
executed derivatives trades with consideration of terms of obligations’ fulfilment and strikes (for
options); the titles and types of derivatives; total amount of derivatives contracts; total volume of
derivatives trades; daily high and low price; the number of the derivatives underlying (lot); open
interest; initial margin size.
 information about share index values for the trading day calculated at least once per minute and
used for suspension of trading.
Principle 9. [Relevant Disclosures]
The relevant regulatory authorities and/or the system sponsor should ensure that system users
and system customers are adequately informed of the significant risks particular to trading
through the system. The liability of the system sponsor and/or the system providers to system
users and system customers should be described; especially any agreements that seek to vary
the allocation of losses that otherwise would result by operation of law.
Losses incurred by the participants due to malfunction or other failures on the Moscow Exchange are
considered within the civil law relations (Civil Code of the Russian Federation). Special agreements or
one-sided obligations of the Moscow Exchange regulating the procedure for participation of the Moscow
Exchange in compensation for losses of the Settlement Entities are not provided for and are not applied.
The Moscow Exchange should also disclose information regarding any detected malfunctions or
occurrence of off-normal situations on its web-site or in another suitable manner (electronic
documentary circulation, notification through the trading system — user terminal) pursuant to the
Regulations “On Trading Organization Activity”.
Principle 10. [Allocation of Supervisory Responsibility]
Procedures should be developed to ensure that the system sponsor, system providers, and
system users are aware of and will be responsive to the directives and concerns of relevant
regulatory authorities.
The Bank of Russia may send instructions to the Moscow Exchange, NCC, NSD and professional
market participants on elimination of the detected violations of the legislation of the Russian Federation
or adoption of measures aimed at avoidance of committed violations in the further activities of the
organization. Internal documents of the Moscow Exchange Group are brought in line with the changes in
the regulations of the Bank of Russia. On the change in the internal documents of the Moscow
Exchange, NCC, NSD participants are reported immediately, there is a requirement of the Bank of
Russia on the disclosure of relevant information on the official website of the Moscow Exchange, the
NCC, the NSD. In addition, participants are notified of changes in the internal documents on the EDI
system.
Principle 11. Regulatory authorities with responsibilities arising from the operation of cross-
border markets for derivative products (‘relevant regulatory authorities’) should develop
cooperative arrangements and coordinate supervisory responsibilities, consistent with each
authority’s responsibilities and in a manner that promotes regulatory effectiveness and avoids
the imposition of unnecessary regulatory costs.
The system of regulation and supervision on the financial market does not contradict the international
practice of regulation of the financial market. One of the steps in the realization of access of the USA
residents to the Russian market of derivative financial instruments is establishment of cooperation
between regulatory authorities of the Russian Federation and the USA for the purposes of coordination
of supervisory functions in accordance with responsibilities of each body (Memorandum of
Understanding between the Bank of Russia and CFTC).
Principle 12.

54

DC\2654041.3
 Exhibit D-2

Each regulatory authority with responsibilities related to a cross-border market for derivatives
(whether in respect of the market operator or the market participants) should be prepared to
share relevant information in an efficient and timely manner. In developing cooperative
arrangements, regulators should attempt to identify in advance the information needed, the
sources of that information, the manner in which the information can be obtained and the
channels through which it can be shared.
The Bank of Russia has significant experience of cooperation with regulatory authorities of foreign
states, including by way of signing of agreements for information exchange. The regulatory authority is
ready to provide for sources and methods of obtaining of information, as well as methods of
distribution/provision of information necessary for effective functioning of the international derivatives
market.
Principle 13.
The applicable regulatory requirements in the jurisdiction of each relevant regulatory authority
and the framework for regulatory coordination and cooperation should be transparent.
The Bank of Russia supports the use of transparency in the standards of coordination of regulation and
cooperation with the foreign regulatory authorities.
Principle 14.
In considering their approach to cross-border markets for derivatives, access jurisdictions
should take into account whether the initial jurisdiction authorizing the market operator applies
the IOSCO Objectives and Principles of Securities Regulation (September 1998) and the 1990
Principles as supplemented above.
IOSCO Principles do not contradict to the relevant Russian legislation. Russian regulatory authorities
intend to use and implement the international principles and standards on the Russian stock and
derivatives markets.
(2) Maintenance of the audit system log (registration of performance of the system subjects):
(i) System log chronologically reflects all necessary information including changes in orders.
(ii) Data of the system log are safely stored and are available within a sufficient period of time.
There is a chronological log in the form of the database, which is located in the safe disk storage.
Database undergoes the regular back-up procedure. The database contains records on transactions of
the trading system from 2003. The database is backed-up daily.
The SPECTRA system archives the following data:
 all actions with orders (/adding/replacing/cancelling)
 deals
 instrument parameters and their changes
 non-trading user requests (i.e. limit changes and so on)
Archive is relational Database, the Microsoft SQL Server 2008 is used currently. The main copy of
archive stores on SAN storage system, using RAID50 disk arrays, SAN system hosted in main Moscow
Exchnage Datacenter. The current year archive data regularly backed up (weekly – full backup, daily –
partial backup – backup of only the data that was changed from the previous backup); backup stored on
reserve datacenter SAN. Past years Databases copied on external media (DVD disks currently). Data
consistency and integrity checked quarterly.
Those disks stored in Moscow Exchange office. For now, archive data available since 2003 year, and
there are no plans to destroy old data. Russian regulation for exchanges requires to store trading
archives for at least 5 (five) years.
(3) Public Data. Adequate and appropriate trade data is available to users and the public
The following market data is made available to the public (disclosed on the website):
a) Real Time Market Data (with delay time of 15 (fifteen) minutes)
The Moscow Exchange offers the data products in regard to Indicies, Equities, Bonds, FX,
Futures&Options. Moscow Exchange real time Market Data includes bid and offer prices, trade volumes
and market depth information. The Moscow Exchange's market data is paid services and may be taken
via distributors providing real time data to their subscribers. Subscription to the real time data is also
available.

55

DC\2654041.3
 Exhibit D-2

Subscribers can view quotations and transactions in separate windows simultaneously, simultaneously
follow trading on all markets, access charts, and configure and manage individual workstations.
Free application iMicex is available for owners of iOS and Android OS smartphones and enables to view
thу market data in real time (for subscribers) or with delay of 15 minutes.
b) Trade results archive
Presented on the website of Moscow Exchange in the form of short trading results (the site is in
completion).
c) Historical Data
Moscow Exchange offers a full range of historical trading data which may be used for optimizing
Participants' trading algorithms, carrying out technical analysis, meeting needs of back offices, etc.
The Moscow Exchange offers the following historical data products:
1. Information on all trades and all orders (order log) – Type А
2. Information on all trades and best orders (top of the book) – Type B
Historical data we offer covers the following Exchange's markets:
1. Securities market
2. FX market
3. Derivatives market
4. OTC market
Data is provided as CSV files. The full Moscow Exchange’s Market Data Services Price List is provided
here.
(4) Reliability. The trading system has demonstrated reliability
All major nodes of the trading system are duplicated. There is a hot reserve of the system spread by
geographical principle. Percentage of uptime is not less than 99.96%.
(5) Secure Access. Access to the trading system is secure and protected
A username and password is required to access the system. The required length of the password is 10
symbols. Kerberos mechanism is used for authentication. The system also uses Handwritten Signature
Equivalent (HSE).
HSE shall mean an attribute of an order, or another electronic document verifying the ownership,
integrity, and intactness of the order, or another electronic document, which is obtained after the Trading
Participant has been assigned its Unique Personal Identifier, Login, and Password. Such HSE will help
identify a Trading Participant, as well as make sure there are no mistakes either in the order, or another
electronic document. BlowFish algorithm is used for encryption.
(6) Emergency Provisions. There are adequate provisions for emergency operations and disaster
recovery
The data center meets Tier-3 requirements. The Moscow Exchange implemented a modern model of
the system to ensure business continuity.
The Moscow Exchange’s Business Continuity Plan will focus primarily on maintaining business critical
processes in the short term strategy, non-critical processes - in the medium term strategy and on full
recovering of all remaining processes in the long term strategy. When Moscow Exchange experiences
difficulties to support business critical systems (both automated and manual) due to failures, attacks or
accidents, the Business Continuity Plan will be activated in a timely manner.
I. Alternative locations
Moscow Exchange manages alternative locations for main offices, which will be put into operational
mode should the access to main offices is blocked. Each alternative location is fully equipped with all
necessary equipment and ready to accommodate employees immediately after declaration of a crisis.
Geographically distributed IT architecture allows not interrupt the IT services in case of a site loss.
II. The process
When implementing a business continuity processes, the Moscow Exchange uses a technique of
international standard for business continuity ISO 22301:2012 and Plan-Do-Check-Act model. Key
elements of this approach are:

56

DC\2654041.3
 Exhibit D-2

 business continuity policy – policy that regulate the activities in the field of business continuity of the
Moscow Exchange;
 business continuity risk assessment – process of risks identification, analysis and evaluation of
their
 impact to business of the Moscow Exchange;
 business impact analysis – is analysis of all business processes of Moscow Exchange and the
effect that a business disruption might have upon them;
 crisis management planning – defining high-level business continuity strategy for Moscow
Exchange which includes predefined principals of crisis management;
 business continuity strategy – defining strategy by scenarios groups for critical areas as staff,
 location/ building, infrastructure, data and suppliers;
 business continuity plan (BCP) – documented collection of procedures and information that is
developed, compiled and maintained in readiness for use in an incident to enable to continue to
deliver its critical activities at an acceptable pre-defined level. All departments have their own BCP
plans, which describes detailed actions in case of an incidents which they have to follow after
overall decision (by crisis management team) of their invocation/ partial invocation.
 disaster recovery plan (DRP) - documented process to recover and protect IT infrastructure in the
event of an incident. DRP sets out the principles for IT recovery and triggers for its invocations. In
addition to DRP we have TRP (technology recovery plans) to all critical IT service/ system with
detailed actions for it recovery in different incidents scenarios.
 incident management planning - clearly defined and documented plan of action for use at the time
of an incident to minimize impact for staff and key business activities;
 crisis communication planning – document defined communication priorities during an incident and
contains number of easy-to-use predefined communication templates to cover both external and
internal communications;
 testing and exercising – Important process designed to validate planning quality, business
continuity process effectiveness and organization preparedness.
 continual improvement – Moscow Exchange strives for continually improve the suitability, adequacy
or effectiveness of business continuity measures. Moscow Exchange reviews business continuity
procedures related documentation including business vontinuity plan annually or earlier (as a result
of significant change in the processes or systems).
III. Business Continuity Management Team
The Moscow Exchange has its own BCM team which addresses BCM related matters including 24/7
“monitor and watch” team. As being a part of the Moscow Exchange Group Moscow Exchange has an
opportunity to use resources of the Group BCM team therefore methodology and implementation
process of the BCMS is the same within a Group. “Monitor and watch” team gets information in regards
to all incidents (IT related, premises related, security related, info security related etc. If incidents have
or potentially will have impact to operations, BCM team follows Incident management plan.
See also Exhibits D-1 (15) and D-2 (5).
(7) Data Loss Prevention. Trading data is backed up to prevent loss of data
Trading data is backed up on a daily basis. The data required for submission to the regulatory
authorities are stored permanently. Additionally, there is a backup copy of the main server of the trading
system, where the necessary data are also stored.
(8) Contracts Available. Mechanisms are available to ensure that only those futures, option or swap
contracts that have been identified to the Commission as part of the application or permitted to be
made available for trading by direct access pursuant to the procedures set forth in § 48.10 are
made available for trading by direct access Available agreements. Mechanisms providing the
possibility of direct access to trading only in instruments admitted by the Commission to trading.
The list of instruments for trading (admission to trading in them) is established by the broker in
accordance with the conditions prescribed in the agreement between the broker and the client
(determined by relationships between them). The current Russian legislation provides that the Moscow
Exchange is permitted to limit the availability of some instruments for trading by different types of
investors (including in narrowing a list of derivatives eligible for trading by the United States residents).
In addition, the Derivatives Rules stipulates that the Moscow Exchange is entitled to limit order entries
and execution of trades in derivatives. For certain limits to be imposed they shall be described in detail
in the Derivatives Rules. The Moscow Exchange is entitled to introduce relevant amendments to the

57

DC\2654041.3
 Exhibit D-2

Derivatives Rules as soon as they are needed (within 2 (two) months due to a registration of the
Derivatives Rules with the Bank of Russia).
The Moscow Exchange is able to set certain limitations on the contracts available for trading. U.S.
residents will have a certain mark in the database of the Moscow Exchange that will allow the Exchange
to identify them. These clients will initially be permitted only to submit orders and execute trades on RTS
Index Futures and Futures on USD/RUB Exchange Rate, unless otherwise permitted by the CFTC by
subsequent order.
(9) Predominance of the Centralized Market. Mechanisms are available that ensure a competitive,
open, and efficient market and mechanism for executing transactions
The Moscow Exchange has the following procedures in place to ensure a competitive, open and efficient
marketplace:
 transparency of price formation: the market price and terms of an instrument are determined strictly
by the standard procedure (developed by the risk management of the Moscow Exchange) and are
the same for all market participants. There are limitations of intraday volatility on price changes
according to the actual situation on the spot market.
 transparency and availability of market information: general information about trading with the
contract is published on the website of Moscow Exchange with the delay in 15 (fiftheen) minutes for
public access. Matching algorithm: The Moscow Exchange uses a price-time priority algorithm. This
is universally used for all orders.
 presence of the Central Counterparty: all transactions are concluded with the central counterparty
(CCP). The CCP is the guarantor of fulfillment of obligations under all transactions.
 concentration of liquidity.
 centralized clearing.
 high speed of conclusion of transactions: immediately.
 client-oriented approach.

58

DC\2654041.3
 Exhibit E-1

Exhibit E — The Terms and Conditions of Contracts proposed to be made available for trading in the United States
Exhibit Е-1
A description of the terms and conditions of futures, option or swap contracts intended to be made available for direct access. With respect to each contract, indicate
whether the contract is regulated or otherwise treated as a futures, option or swap contract in the regulatory regime(s) of the Foreign Board of Trade’s home country.
Below is a chart describing the terms of the contracts intended to be offered to U.S. participants. Additional information is provided following the chart.

Type of
contract in the
Final
Contract Linked Contract Price Initial regulatory
Symbol Underlying asset Settle Quotation Settlement procedure
Description with size tick Margin regime of the
ment
FBOT’s home
country

The Contract’s settlement price shall be

calculated as a weighted average
exchange rate determined on the basis
of the USDRUB_TOM instrument’s
Futures on Value of USD/RUB values generated in the unified trading
1,000 (one Russian 1 ruble per
USD/RUB exchange rate (in cash session system (hereinafter the UTS
Si — thousand) US rubles per 1 1,000 U.S. 5.5% Futures
Exchange Russian ruble per 1 settled system) from 12:00 p.m. MSK to 12:30
dollars USD dollars
Rate (one) US dollar) p.m. MSK inclusive on the Contract’s
settlement day multiplied by a number of
US dollars in the lot and rounded off to
integer value in accordance with the of
mathematical rounding

RTS Index (index

Cash settlement. An average value of
code – RTSI) that is
RTS Index RTS Index calculated during the period
calculated by
value from 15:00 to 16:00 Moscow time of the
Moscow Exchange
denominated last trading day multiplied by 100 is 10 b.p. i.e.
RTS Index in accordance with cash points of
RTS — in basic points; taken as a settlement price. The tick 20 U.S. 12% Futures
Futures the methodology settled RTS Index
1 b.p. shall be value equals 20% of the USD/RUB cents
approved by the
equal to USD2 exchange rate determined in accordance
Moscow Exchange
(two dollars) with the Methodology at 18:30 MSK on
and registered with
the last trading day.
the Bank of Russia

59

DC\2654041.3
 Exhibit E-1

Further Description of Contracts Intended to be Offered to U.S. Participants:

The settlement months for the contracts that are proposed to be offered for trading to US persons are the
four successive quarterly months in the cycle — March, June, September and December. The last trading
day of a contract is the 15th day of the settlement month of the settlement year. If such day is not a trading
day, the next trading day is considered the last trading day. Trading on the last trading day ceases at
close of trading. Final settlement is performed by cash settlement and occurs during the evening clearing
session of the last trading day.
According to the Bank of Russia regulations, a futures contract is one that provides for an obligation of
each of the parties to the contract to regularly pay monetary amounts depending on the changes of prices
or values of the basic asset or occurrence of a circumstance, which is the basic asset. In addition, futures
contract may also provide for the following conditions:
 obligation of a party to the futures contract to transfer to the other party securities, currency or
commodities being the basic asset, including by way of conclusion by the parties to the futures
contract, or by persons, for the benefit of which the futures contract was concluded, of the agreement
of purchase and sale of securities, agreement of purchase and sale of foreign currency or agreement
of supply of commodities (deliverable futures contract);
 obligation of the parties to the futures contract to conclude the agreement, which is a derivative
financial instrument and constitutes the basic asset (cash-settled futures contract).
Therefore, the RTS Index futures contact and futures contract on USD/RUB exchange rate in accordance
with the Russian legislation are cash-settled futures contracts.
By 2006, the RTS Index futures contact had become the most liquid instrument in the Russian derivatives
market. It has been the most liquid instrument of the Russian financial market since 2008.
The RTS Index is a capitalization-weighted (free-float) broad market index composite indices calculated
on the basis of prices of the 50 most liquid Russian stocks of the largest and dynamically developing
Russian issuers with economic activities related to the main sectors of the Russian economy presented
on the Moscow Exchange. The RTS Index was started on September 01, 1995. The Index is calculated
on a real time basis and denominated in US dollars.
The rules of calculation of the RTS Index imply an accurate and transparent procedure for forming the list
of index constituents, including a quarterly publication of waiting lists that contain securities to be included
into the Index when reviewing the constituents list. The Index Committee of CJSC MICEX Stock
Exchange, an advisory body consisting of the leading analysts of the Russian financial market and
representatives of the professional community, participates in selecting stocks to be included in the RTS
Index.
Description of RTS Index
 The value of the RTS Index is published one time per second.
 Time of calculation is from
 Until 14.02.2014: from 19:00 to 23:50 and from 10:00 to 18:40
 From 17.02.2014 to 11.03.2014: from 10:00 to 18:40
 From 12.03.2014: from 10:00 to 18:5019:00 to 23:50 and from 10:00 to 18:45
 Initial capitalization amounts to USD 12,7 bln.
 Weight restriction in the Index for an individual stock is 15%
 Weight restriction in the Index for 5 stocks is 55%
 The current list of constituent stocks
 Period when the list of stocks-index constituents changes: Changes in the list of index constituents
take effect on March 16th, June 16th, September 16th, December 16th: Before December, 2010 —
on March 15th, June 15th, September 15th, December 15th
 Methodology of Index calculation
Values and coefficients of the RTS Index
 Graphs
 History: http://www.rts.ru/en/index/stat/dailyhistory.html?code=RTSI

60

DC\2654041.3
 Exhibit E-2

Exhibit Е-2
Demonstrate that the contracts are not prohibited from being traded by United States persons, i.e., the
contracts are not prohibited security futures or single stock contracts or narrow-based index contracts. For
non-narrow based stock index futures contracts, demonstrate that the contracts have received
Commission certification pursuant to the procedures set forth in § 30.13 and Exhibit D to part 30 of this
chapter
The USD/RUB futures contract is not based on securities or a security index, and is therefore neither a
security future, single stock contract or a narrow-based index contract.
The RTS Index is composed of a wide range of components. The procedure for calculation of the RTS
Index is set forth in the Methodology of the Moscow Exchange Indices Calculation.
The RTS Index is not a narrow-based security index because:
(i) it is composed of more than 9 (nine) component stocks (50 securities as established by
Methodology of the Moscow Exchange Indices Calculation);
(ii) no component stock cannot comprise more than 30% of the index’s weighting (actually 15%)
— a stock’s weight in the RTS Index is determined by the float-adjusted market
capitalization of the stock, but all stocks are quarterly capped at 15% in terms of their index
weight versus the total index capitalization (established by Methodology of the Moscow
Exchange Indices Calculation);
(iii) the aggregate weighting of the five highest weighted component stocks cannot be more than
60% of the aggregate weighting of the index (established by Methodology of the Moscow
Exchange Indices Calculation); and
(iv) the lowest weighted component stocks comprising 25% of the index’s weighting have the
aggregate dollar value of average daily trading volume of more than USD 30 mln. required
(Actually).
Because the RTS Index is composed of multiple securities but is not a narrow-based security index,
futures contracts on the RTS Index are not prohibited security futures contracts.
Simultaneously with the filing of this FBOT application, the Moscow Exchange is submitting a request that
the Commission certify that the RTS Index conforms to the requirements of section 2(a)(1)(C)(ii) of the
Commodity Exchange Act (“CEA”) and therefore, that futures contract may be offered or sold to persons
located within the United States in accordance with section 2(a)(1)(C)(iv) of the CEA.
Thus, the RTS Index exceeds the minimum criteria to be not considered a narrow-based index.

61

DC\2654041.3
 Exhibit E-3

Exhibit Е-3
Demonstrate that the contracts are required to be cleared
Clause 2.7 of the Derivatives Rules, which is applicable to all contracts executed on the Derivatives
Market of the Moscow Exchange (i.e., the only market that US participants would have access to in order
to trade USD/RUB futures and RTS Index Futures), states that the NCC shall conduct centralized clearing
for the executed derivatives trades.

62

DC\2654041.3
 Exhibit E-4

Exhibit E-4
Identify any contracts that are linked to a contract listed for trading on a United States-registered entity, as
defined in section 1a (40) of the Act. A linked contract is a contract that settles against any price
including the daily or final settlement price) of one or more contracts listed for trading on such registered
entity.
Neither the USD/RUB futures contract nor the RTS Index futures contract settle against any price of one
or more contracts listed for trading on a U.S.-registered entity. Therefore, such contracts are not linked
contracts.

63

DC\2654041.3
 Exhibit E-5

Exhibit E-5
Identify any contracts that have any other relationship with a contract listed for trading on a registered
entity, i.e., both the foreign board of trade’s and the registered entity’s contract settle to the price of the
same third party-constructed index.
None of the contracts proposed to be offered to U.S. participants are connected with instruments that are
listed on a market place registered in the United States.

64

DC\2654041.3
 Exhibit E-6

Exhibit Е-6
Demonstrate that the contracts are not readily susceptible to manipulation. In addition, for each contract
to be listed, describe each investigation, action, proceeding or case involving manipulation and involving
such contract in the three years preceding the application date, whether initiated by the foreign board of
trade, a regulatory or self-regulatory authority or agency or other government or prosecutorial agency. For
each such action, proceeding or case, describe the alleged manipulative activity and the current status or
resolution thereof.
The Moscow Exchange proposes to offer RTS Index Futures and USD/RUB Exchange Rate futures for
trading to US persons. Both of these contracts are cash-settled, and the RTS Index is calculated by the
Exchange in accordance with a methodology registered with the Federal Body. The RTS Index is a
complex indicator of the market, reflecting the dynamics of the prices of 50 of the most liquid securities. It
is therefore reliable and created by an independent entity, and is not readily susceptible to manipulation.
The USD/RUB Exchange Rate futures contract is settled at a price reflecting the underlying exchange
rate markets. Therefore, the two contracts proposed to be offered for trading to US persons are not
readily susceptible to manipulation because they are cash-settled, will not be subject to manipulation or
distortion, and are based on data that is reliable and independent. Upon maturity of the USD/RUB
Exchange Rate futures contracts, only the final cash settlement (and not physical delivery) is required.

65

DC\2654041.3
 Exhibit F(1)

Exhibit F — The Regulatory Regime governing the Foreign Board of Trade in its
home country (country of registration)
With respect to each relevant regulatory regime or authority governing the foreign board of trade, attach,
as Exhibit F, the following (including, where appropriate, an indication as to whether the applicable
regulatory regime is dependent on the home country’s classification of the product being traded on the
Foreign Board of Trade as a future, option, swap, or otherwise, and a description of any difference
between the applicable regulatory regime for each product classification type):
Exhibit F(1)
A description of the regulatory regime/authority’s structure, resources, staff, and scope of authority; the
regulatory regime/authority’s authorizing statutes, including the source of its authority to supervise the
foreign board of trade; the rules and policy statements issued by the regulator with respect to the
authorization and continuing oversight of markets, electronic trading systems, and clearing organizations;
and the financial protections afforded customer funds.
The Bank of Russia is a specific public and legal institution (authority) with the purpose to protect and
ensure sustainability of the ruble; develop and improve the Russia’s bank system, ensure stability and
development of the national payment system and financial market.
The Bank of Russia’s status, purposes, functions and powers are stipulated in the Constitution of the
Russian Federation and the following Federal Laws:
 “On the Central Bank of the Russian Federation (the Bank of Russia)”
 “On Banks and Banking Activity”
 “On Securities Market”
 “On Organized Trading”
 “On Clearing and Clearing Activity”
 “On Central Depository”
 “On protection of rights and lawful interests of Investors on the Securities Market”
 “On Investment Funds”
 “On Non-State Pension Funds”
 “On counteracting illegal use of Inside Information and Market Manipulation, and amending certain
legislative acts of the Russian Federation”.
Overview of the system of regulation of the securities market and derivatives market
Large-scale reformations have taken place regarding the regulation of financial markets in the Russian
Federation over the last 3 (three) years. Namely, among other things, the Federal Service for Insurance
Supervision was integrated with the Federal Financial Markets Service (“FFMS”) with transfer of functions
of regulation of the insurance market to the FFMS 12. Additionally, the Government of the Russian
Federation was commissioned to allocate functions of normative legal regulation in the sphere of the
Russian financial market between the Ministry of Finance of the Russian Federation and FFMS.
In the wake of the recession, regulatory principles were reviewed with the intent of ensuring that
regulatory systems and market infrastructure are able to react in a timely and quality manner under the
conditions of unsteadiness of the world and Russian market environment. Lawmakers had begun
discussing the creation of a financial mega-regulatory authority in Russia as early as in the first half of
2000s, and this was completed in 2012 when the FFMS began the process of being integrated into the
Bank of Russia.
The FFMS was abolished on 1 September 2013 by executive order No.645 of the President of the
Russian Federation dated 25 July 2013. The FFMS’s powers to regulate, control and supervise the
financial markets were transferred to the Bank of Russia as from 1 September 2013 (the Federal Law of
July 23, 2013 No.251-FZ “On introducing some amendments to certain legislative acts of the Russian
Federation in relation to the transfer of the powers to regulate, control and supervise the Financial
Markets to the Central Bank of the Russian Federation”).
The Bank of Russia Financial Market Service (the “FMS”) was established on 1 September 2013 to
perform the Bank of Russia’s functions of the financial markets regulation, control and supervision. The
FMS is a part of the Bank of Russia established by a decision of the Board of Directors of the Bank of
Russia following the integration of the Federal Financial Markets Service (FFMS) and the Bank of Russia.

12
Decree of the President of the Russian Federation of March 4, 2011 No. 270 On Measures of Improvement of the State
Regulation in the Sphere of Financial Market of the Russian Federation
66

DC\2654041.3
 Exhibit F(1)

Since March 3, 2014 the FMS was abolished and their powers were transferred to established
subdivisions of the Bank of Russia, thereby marking the end of separate regulation of different financial
markets sectors.
I. The Bank of Russia
a. Structure, resources, staff, and scope of authority
The Bank of Russia is a specific public and legal institution (authority) with the purpose to protect and
ensure sustainability of the ruble; develop and improve the Russia’s bank system, ensure stability and
development of the national payment system and financial market.
General functions and powers performed by the Bank of Russia on the securities market (incl. the
derivatives market) are set forth in the Federal Law No.39-FZ “On Securities Market” and include the
following:
• elaborating main areas of the financial market development together with the Government of the
Russian Federation;
• approving standards for securities issue, prospects, issue-grade securities state registration
(primary and further issues), state registration of the issue reports and securities prospects;
• elaborating and approving standard requirements for the rules of professional activities on
securities;
• setting out mandatory requirements for operations in securities; criteria for securities to be admitted
to public placement, trading, quotation and listing; settlement and depository activities; rules of
record-keeping and reporting (except for accounting and accounting reports) by issuers and
professional securities market participants;
• setting out mandatory requirements for keeping the register;
• setting procedure for licensing different professional activities on the securities market and
execution thereof; suspending and revocation of said licenses;
• setting procedure for issuing permissions on acquiring the status of self-regulated organization of a
professional securities market participant and execution thereof; keeping the register of said
organizations; revocation of said permissions;
• setting standards of business conduct for investment, non-government pension and insurance
funds and their assets management companies, and insurance companies;
• monitoring compliance of issuers, professional securities market participants, their self-regulated
organizations with the Russia’s financial market legislation;
• monitoring operations in cash and other assets made by professional securities market participants
in order to combat legalization (laundering) criminally gained incomes;
• ensuring disclosure of information on registered securities issues, professional securities market
participants and financial market regulatory framework;
• establishing the publicly available system of information disclosure on the financial market;
• setting qualification requirements for employees of professional securities market participants;
requirements for their expertise; establishing the qualification exams programs;
• elaborating draft regulatory acts related to the securities market, licensing its professional
participants, their self-regulated organizations; monitoring of compliance with legislative and
regulatory acts on securities;
• elaborating recommendations on use of the Russia’s legislation governing relationships on the
securities market;
• setting the procedure for keeping the register of the professional securities market participants;
• establishing and determining the procedure for admitting securities of issuers registered in the
Russian Federation to initial placement and trading abroad;
• applying to an arbitration court for liquidating a legal entity that violated the securities law and for
imposing lawful sanctions to such entity;
• monitoring the correspondence between the securities issue volume and floating securities;
• establishing the procedure for keeping the register of issue-grade securities and execution thereof;
and
• certain other functions.
The Bank of Russia’s main powers in the area of organized trading are set forth in the Federal Law
No.325-FZ “On Organized Trading”. They include, in particular, the following items:
• regulating organized trading including adoption of regulatory acts on this matter;
• conducting the unified state policy in the area of organized trading;
• setting standards for the organized trading procedure;

67

DC\2654041.3
 Exhibit F(1)

• establishing procedure for keeping the register of trading participants and their clients, order
register and register of contracts executed during the organized trading;
• determining specifics of organized trading in securities and derivatives contracts intended for
qualified investors; determining procedure and timeframe for the organizer of trading to announce
data on such securities and contracts in such securities (data on such derivatives);
• registering organized trading rules and other documents of the organizer of trading including
specifications of contracts that must be registered and any amendments thereto;
• licensing exchanges and trading systems;
• revocation of exchange and trading system licenses;
• setting restrictions for commodities eligible for organized derivatives trading and requirements for
commodities to be admitted to organized trading;
• setting standards for content of derivatives contracts specifications;
• defining circumstances under which the organizer of trading must calculate prices, indices and
other indicators, as well as procedure and time for such calculation; defining cases in which
methodologies for calculating prices, indices and other indicators calculated by the organizer of
trading must be registered;
• determining requirements for the procedure and time of calculation of organizer of trading own
assets as well as setting other standards to decrease risk associated with running the organized
trading;
• setting standards for internal audit of organizers of trading;
• defining rules, content, procedure and time for disclosing (providing) information by organizers of
trading;
• setting extent, procedure, time and forms of reports, notices and communications to be submitted
by organizers of trading and persons that exercise, directly or indirectly, five or more per cent of
organizer of trading ordinary shares (interest), to the Bank of Russia.
• setting standards for storing and protecting information and documents related to running the
organized trading as well as for a retention period thereof;
• determining the qualification exams program to assess individuals whose work activities related to
running the organized trading;
• cancelling a qualification certificate if the certified person committed repeated or gross violation of
prescribed requirements;
• imposing eligibility and expertise requirements for employees of organizers of trading;
• giving a preliminary approval to electing (appointing) employees of organizers of trading (sole
executive body, controller, chief risk officer);
• monitoring compliance of organizers of trading with the Russia’s legislation;
• conducting an audit of organizers of trading;
• taking measures stipulated in the federal laws to prevent, identify and suppress violations of any
federal laws and regulatory acts adopted pursuant to such laws;
• filing a claim to a court to liquidate a legal entity operating without relevant licenses obtained and in
other cases;
• exchanging any confidential information with a relevant authority (organization) of a foreign country
on the basis of an agreement with such authority (organization);
• exchanging personal data with a relevant authority (organization) of a foreign country on the basis
of a relevant agreement with such authority (organization); and
• certain other functions.
The Bank of Russia's structure
The Bank of Russia’s organization is a unified vertical management system. It comprises the head office,
territorial agencies, cash settlement centers, computing centers, field institutions, educational institutions,
Russian Encashment Association and other entities supporting the Bank of Russia’s operation.
The head office of the Bank of Russia includes the following main divisions, sub-divisions and
departments:
 General Economic Department;
 Statistics Department;
 Cash Circulation Department;
 National Payment System Department;
 Accounting & Reporting Department;
 Credit Institutions Licensing & Financial Rehabilitation Department;
 Central Catalogue of Credit Histories;
 Banking Supervision Department;

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 Banking Regulation Department;

 System-Important Banks Supervision Department;
 Chief Inspection of Credit Institutions;
 Financial Market Operations Department;
 Financial Market Operations Providing&Control Department;
 Financial Stability Department;
 Financial Monitoring & Foreign Exchange Control Department;
 Monetary Policy Department;
 Financial Market Development Department;
 Financial Market Admission Department;
 Insurance Market Department;
 Collective Investments & Trust Management Department;
 Securities Market & Commodity Market Department;
 Main Office of the Microfinancing Market & Methodology of Financial Availability;
 Non-credit Institution Reports Collecting & Processing Department;
 Main Office of Counteraction to Unfair Behavior in the Open Market;
 Financial Services Consumers & Minority Shareholders Rights Protection Service;
 Legal Department;
 Field Institutions Department;
 IT and Telecommunications Department;
 Information Systems Department;
 Human Resources & Personnel Management Department;
 Finance Department;
 Internal Audit Department;
 International Cooperation & Public Communications Department;
 Bank of Russia Press Service;
 International Financial & Economic Relations Department;
 External & Public Relations Department;
 Administrative Department;
 Main Office of the Bank of Russia Real Estate;
 Main Office of the Bank of Russia Capital Expenditure Review and Planning;
 Main Office of Security and Information Protection.
b. Source and scope of authority
The Bank of Russia’s status, purposes, functions and powers are stipulated in the Constitution of the
Russian Federation, the Federal Laws “On the Central Bank of the Russian Federation (the Bank of
Russia)”, “On Banks and Banking Activitiy”, “On Securities Market”, “On Organized Trading”, On Clearing
and Clearing Activity”, “On Central Depository”, “On protection of rights and lawful interests of Investors
on the Securities Market”, “On Investment Funds”, “On Non-State Pension Funds” and “On counteracting
illegal use of Inside Information and Market Manipulation, and amending certain legislative acts of the
Russian Federation”, “On features of implementation of financial operations with Foreign Citizens and
Legal Entities”.
c. Relevant rules and policy statements
As mentioned above the FMS was abolished and their powers were transferred to established
subdivisions of the Bank of Russia since March 3, 2014. Before this the Bank of Russia has not issued
any rules or policy statements since it received powers to regulate, control and supervise financial
markets concerning the authorization and continuing oversight of markets, electronic trading systems,
and clearing organizations. The Bank of Russia has begun the regulatory acts’s issuing process and
issued the following acts in 2014:
 05.03.2014 – Order of the Bank of Russia No.R-151”On the List of Officials of the Bank of Russia,
authorized to consider cases on administrative offenses”
 12.04.2014 – Order of the Bank of Russia No.R-301”On distribution of duties on control and
supervision of legislation observance in the sphere of professional activity on Securities Market
(including Central Depositary’s activity), activity for carrying out the Organized Trading, Clearing
Activity (including Central Counterparty’s activity) in the Bank of Russia”
 07.07.2014 – Indication of the Bank of Russia No.3311-U “On notification procedure of the Bank of
Russia the organizations of the Financial Market about registration facts in Foreign Tax Authority”

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 07.07.2014 – Indication of the Bank of Russia No.3312-U “On features of interaction of the
Financial Market organizations for cancellation of the financial services contracts, and also
concerning closing of bank accounts on the bases following from features of the legislation of the
Foreign State on taxation of foreign accounts”
 21.07.2014 – Indication of the Bank of Russia No.3329-U “On requirements to own means of
professional participants of Securities Market and Asset Management companies of Investment
Funds, Mutual Investment Funds and Non-State Pension Funds”
 25.07.2014 – Indication of the Bank of Russia No.3341-U “On recognition of the infrastructure
organizations of the Financial Market systemically significant”
 ************ – Regulations of the Bank of Russia No.**** “On Activity of Organizers of Trading”
 ************ – Regulations of the Bank of Russia No.**** “On types of Derivative Financial
Instruments”
Exhibit F (2) described that that the Moscow Exchange obtained the exchange license on August 29,
2013 by meeting the standards set forth in the Federal Law No.325-FZ “On Organized Trading.” These
standarts were license requirements and conditions of this Federal Law and the regulations adopted
according to it:
1) to an organizational and legal form;
2) to existence of one or several separate structural divisions in case of combination of the
specified activity with other kinds of activity;
3) to own means;
4) to the persons having the right directly or indirectly (through persons under control to them) it is
independent or together with other related persons to dispose of 5 and more percent of votes,
falling on the voting shares making authorized capital of the competitor of the license (licensee);
5) to the person which is carrying out functions of individual executive body, board members
(supervisory board), members of collegial executive body, the head of internal control (controler),
the chief accountant or other certain official of the organizer of trading;
6) to rules of the organized trading;
7) to an order of the organization of monitoring of the organized trading, and also control of bidders
and other persons according to requirements of Federal Laws and the regulations adopted
according to them;
8) to the organization of internal control;
9) to the document (documents) defining measure, directed on decrease in risks of activity on the
organization of trading.
Other licenses of the exchange (the stock exchange, the organizer of trading, commodities exchange and
currency exchange licenses) will be revoked on January 1, 2014 according to the provisions of the
Federal Law No.325-FZ.
At that time, the Moscow Exchange will be required to have only one license of the exchange (replacing
several old ones) issued by the Bank of Russia on August 29, 2013. This new license is given in clause 1
of the Exhibit A-7 FBOT Application.
d. Protections afforded to customer funds
See Exhibit E (3) (vii) to Supplement S-1 and Exhibit F (3) (iii) of the FBOT Application.

II. Other governmental authorities

In addition to the Bank of Russia a number of functions connected with regulation and control of the
financial markets are performed by other governmental authorities.

1. Ministry of Finance of Russia is the federal executive body. The Ministry of Finance of Russia
performs functions of state policy and normative legal regulation in the sphere of budgetary, tax,
insurance, currency, banking operations, state debt, circulation of precious metals and precious
stones, formation and investment of funds for financing of the funded part of labour pension, state
regulation of activities of the non-state pension funds, asset management companies, specialized
depositaries and actuaries on non-state pension coverage, mandatory pension insurance and
professional pension insurance. Russia’s Ministry of Finance elaborates main areas of the financial
market development in collaboration with the Bank of Russia.

70

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2. The Ministry of Economic Development of the Russian Federation (the “MEDT”) is the federal
executive body responsible for development of the state policy and normative legal regulation in
the following spheres:
 analysis and forecasting of social and economic development,
 development of entrepreneurial activities, including medium business and small business;
 property relations,
 insolvency (bankruptcy) and financial rehabilitation,
 valuation activities,
 investment activities and state investments,
 formation of interstate and federal special-purpose programmes (long-term purpose-oriented
programmes), departmental special-purpose programmes, development and implementation
of programmes of economic and social development of the Russian Federation,
 creation and operation of special economic zones in the territory of the Russian Federation,
management of the state material reserve,
 placement of orders for delivery of goods, performance of works, rendering of services for
the state and municipal needs.
MEDT is one of the governmental authorities participating in development and discussion of all
regulatory legal acts connected with development of the financial market. At the present time the
MEDT is one of the key authorities in discussion of issues of the pension system development, as
well as of issues of improvement of corporate governance in Russian issuers.
MEDT is governed by the Constitution of the Russian Federation, federal constitutional laws,
federal laws, acts of the President of the Russian Federation and Government of the Russian
Federation, and international treaties of the Russian Federation. The fundamental document
governing the operation of the MEDT is the Regulations for the Ministry of Economic Development
of the Russian Federation approved by the Government of the Russian Federation.
3. The Federal Anti-Monopoly Service (the “FAS”) implements the anti-monopoly legislation and
legislation on advertisement by the participants of the financial markets. In addition, the Federal
Anti-Monopoly Service has control over performance of foreign investments in business entities of
strategic importance for assurance of national defense and national security. The FAS is a federal
executive body and is therefore controlled by the Government of the Russian Federation.
4. The Federal Service for Financial Monitoring (“FSFM”) performs several functions, including:
 counteracting the money laundering related to the proceeds of crime and the financing of
terrorism,
 developing the state policy and normative legal regulation regarding money laundering,
 coordinating with other federal executive bodies, as well as the national center of
assessment of threat to national security resulting from money laundering and the
distribution of weapons of mass destruction,
 developing measures for combating these threats according to clause 1 of the Regulations
for the Federal Service for Financial Monitoring approved by the Decree of the President of
the Russian Federation.
One of the most important objectives assigned to the FSFM was improvement of the image of
Russia in the international community. Due to the efforts of the FSFM in June, 2003, Russia
became the member of Financial Action Task Force on Money Laundering (“FATF”). The FSFM is
controlled by the President of the Russian Federation.
5. The Ministry of Health Care and Social Development of the Russian Federation performs state
regulation of activities of non-state pension funds on non-state pension coverage, mandatory
pension insurance and professional pension insurance in the part of legal relations between the
non-state pension fund and participants of the non-state pension fund, insured persons and their
legal successors, as well as in the part of legal relations, the subject of which is the Pension Fund
of the Russian Federation.

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 Exhibit F(2)

Exhibit F(2)
Description of laws, rules, provisions and accepted standards being in effect in the following areas:
(1) The authorization, licensure or registration of the Foreign Board of Trade.
The Moscow Exchange operates on the basis of the exchange license gained in accordance with
standards set forth in the Federal Law No.325-FZ “On Organized Trading”. That license provides for,
inter alia, a permission to run trading in derivatives in the Russian Federation. As per the Federal Law
No.325-FZ, the organizer of trading is a legal entity provided services on running organized trading on the
commodities and/or financial markets on the basis of an exchange license or a trading system license.
This definition and the available exchange license implies that current regulatory framework does not
impose the requirement to obtain a stock market license and an organizer of trading license stipulated in
the Federal Law No.39-FZ “On Securities Market” as well as a license for organizing trading in
commodities in the territory of the Russian Federation which is stipulated in the Law No.2382-1 “On
Mercantile Exchanges”.
Due to a new procedure for licensing exchanges that was set forth in the law 325-FZ, the regulator (the
Bank of Russia) will unify the existing licenses (the stock exchange, organizer of trading, commodities
exchange and currency exchange licenses) until January 1, 2014. The unification implies that one license
will be issued (the exchange license as per the Federal Law No.325-FZ “On Organized Trading”) to
replace all those mentioned above.
As mentioned above, the Moscow Exchange obtained the exchange license on August 29, 2013 by
meeting the standards set forth in the Federal Law “On Organized Trading”. Other licenses of the
exchange (the stock exchange, organizer of trading, commodities exchange and currency exchange
licenses) will be revoked on January 1, 2014 according to the provisions of the Federal Law No.325-FZ.
As it mentioned above license requirements and issue conditions for the exchange license prescribed in
the Federal Law No.325-FZ “On Organized Trading” and regulatory acts adopted pursuant to this Federal
Law. Besides, this Federal Law establishes requirements to documents which an applicant has to submit.
To obtain this license, the applicant must furnish the Bank of Russia with the following documents:
 license application;
 questionnaire;
 document on a registration of the applicant in the Unified State Register of Legal Entities;
 copies of applicant’s constitutive documents;
 copy of the document of registration with the tax authority;
 copies of documents proving that the following persons were elected (appointed): company’s sole
executive body, members of the Supervisory Board and the collegial executive body, controller, chief
accountant, director of the company’s division responsible for organizing of trading, and chief risk
officer);
 document containing information on a person eligible to manage 5 and more per cent of votes
represented by shares (interest) carrying voting rights and comprising the share capital of the
organizer of trading;
 Rules of Organized Trading, document prescribing organization principles and procedure of internal
audit and document prescribing measures to reduce risks associated with organization of trading;
 document containing calculation of own assets;
 document prescribing the procedure for storing and protecting information related to running
organized trading;
 list of steps to be undertaken to prevent a conflict of interests while running organized trading;
 copy of the balance sheet as of the last reporting date;
 records on borrowed funds and accounts receivable as of the last reporting date;
 copy of the profit and loss statement as of the last reporting date;
 certificate on the financial investment structure;
 copy of the audit opinion on a reliability of financial (accounting) reports for the last year;
 copies of documents proving the state registration of all share issues and the last report on the share
issue results if the applicant is a joint stock company;
 document proving the payment of state duty for provision of the license;
 other documents prescribed by the Law.

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 Exhibit F(2)

The Bank of Russia decides on whether to issue the license or deny the application within two months
after receiving all required documents. Applicants for obtaining the exchange license may be denied due
to the following reasons:
 submitted documents contain incomplete or unreliable information;
 submitted documents fail to meet requirements set forth by the Federal Law No.325-FZ and
regulatory acts adopted on the basis of this Federal Law by the Bank of Russia;
 the Applicant has failed to provide information requested by the Bank of Russia to affirm applicant’s
compliance with the licensing requirements;
 the Applicant fails to comply with the licensing requirements and conditions.
(2) The regulatory regime/authority’s program for the ongoing supervision and oversight of the
Foreign Board of Trade and the enforcement of its trading rules.
Powers to regulate, control and supervise the financial markets were transferred from the Federal
Financial Markets Service (FFMS) to the Bank of Russia under the recent amendments to the Russian
legislation (the Federal Law No.251-FZ was adopted). Moscow Exchange is to be controlled and
overseen with respect to fulfillment of the following requirements:
 license requirements and conditions in the performance of the respective activities 13;
 observance of legislation of the Russian Federation on securities, on joint stock companies, on
protection of rights and legitimate interests of investors on the securities market, on counteracting
the legitimization (money laundering) of the proceeds of crime and the financing of terrorism, on
commodities exchanges;
 disclosure of information on operation of the organization. According to part 2 of article 22 of the
Federal Law No.325-FZ the organizer of trading should to provide disclosure of the following
information and documents:
 the constituent documents;
 Rules of the Organized Trading;
 regulations on exchange council (council of section);
 annual reports of the Exchange with the appendix of audit reports concerning annual accounting
(financial) reports containing in annual reports;
 the cost of rendering services of the Exchange;
 time of carrying out the organized trading (according to rules of the organized trading);
 decisions of the exchange’s council (council of section);
 other information which disclosure is provided by the legislation.
Information reveals to all interested persons. According to part 3 of article 22 of the Federal Law
No.325-FZ Information and documents which are provided by part 2 of article 22, reveal the
Exchange by placement on its site in information and telecommunication networks (including in the
Internet network);
 presentation of the reporting of the organization14;
 proprietary funds and other specified indicators; and
 compliance of the employees of the organization with qualifying requirements; for compliance of the
employees of the organization responsible for observance of the rules of internal control and
programmes of its exercise for the purposes of counteracting the legitimization (money laundering) of
the proceeds of crime and the financing of terrorism, qualifying requirements established by the
legislation of the Russian Federation.
(3) The financial resource requirements applicable to the authorization, licensure or registration
of the Foreign Board of Trade and the continued operations thereof
The minimum ratio of sufficiency of proprietary funds is established for obtaining of the exchange license
in the amount of RUR 100 mln. (USD 3.3 mln.)15. (See Exhibit F (2) (i) of the FBOT Application).
Proprietary Funds of the Moscow Exchange as of September 30, 2014 more than RUR 65.1 bln. (more
than USD 1.6 bln.), exceeding the Russian legislation’s requirements by several times.

13 The license requirements and conditions are applied on an ongoing basis. According to part 1 of article 28 of the Federal law
325-FZ license can be cancelled by the Bank of Russia in case of violation by the organizer of trade of the requirements established
by the legislation repeatedly within one year.
14 According to point 15 of part 1 of article 25 of the Federal Law No. 325-FZ the Bank of Russia establishes the volume, order,
terms and representation forms, including representation in an electronic form with an electronic signature, in the Bank of Russia of
reports, notices and messages organizers of trade.
15 According to part 2 of article 8 of the Federal law 325-FZ organizer of trading has to observe liquidity standards, standards of
sufficiency of proprietary funds, which are established by the Bank of Russia. This is a license requirement that applied on an
ongoing basis.
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(4) The extent to which the IOSCO Principles are used or applied by the regulatory
regime/authority in its supervision and oversight of the Foreign Board of Trade or are
incorporated into its rules and regulations and the extent to which the regulatory
regime/authority reviews the applicable trading systems for compliance therewith
The Moscow Exchange is not certified for compliance with IOSCO principles because this standard is not
currently applicable in the Russian Federation. However, the examination of this standard showed that
this certification is possible because the Moscow Exchange complies with these principles. (See Exhibit
D-2 (ii) of the FBOT Application).
Even though the Russian Federation does not apply the IOSCO principles, however, the approach
underlying the regulation of the Russian financial market reflects and complies with IOSCO principles.
The Russian regulatory authority strives to make the laws and regulatory acts rely upon principles aimed
at improvement of transparency of the market, reliability of the trading system, equality of participants,
increase of financial stability of participants of the market. Moreover, the Russian regulatory authorities
attempt to rely on the international experience and recognized generally accepted worldwide standards.
Russian regulatory authorities also encourage the implementation by the infrastructural organizations
(exchanges, clearing centers and depositories) and participants of the market of advanced technologies
and approaches, which they may formalize in their internal documents. The Russian government
authorities are currently working with the Financial Stability Council to take measures for improvement,
development and to bring the Russian legislation to conformity with obligations undertaken by the G-20
leaders. For more information regarding conformity with the G-20 commitments, see Appendix 8 to the
FBOT Application.
(5) The extent to which the regulatory regime/authority reviews and/or approves the trading
rules of the Foreign Board of Trade prior to their implementation.
Amendments to the rules of an exchange require approval of the Committee of the Moscow Exchange
(for the Dertivatives Rules, the Derivatives Market Committee must approve such amendments),
Exchange Committee and Supervisory Board. In order to register the rules of an exchange or make any
amendments or modifications thereto, the following documents must also be presented to the Bank of
Russia:
 application for registration of the documents (amendments and modifications thereto);
 document with the amendments and modifications introduced thereto or new version thereof;
 copy of (extract from) the resolution of minutes of the Supervisory Board;
 document confirming payment of the state duty; and
 document providing approval of the rules by an authorized body.
The responsible officer of the Bank of Russia examines the presented set of documents for:
 completeness and authenticity of the information;
 compliance with the requirements set forth in the Federal Law “On Organized Trading” and
regulatory acts adopted based on this law; and
 detection of contradictions with other internal documents of the Moscow Exchange (for example,
clearing rules).
The Moscow Exchange’s Trading Rules and any alterations or modifications thereto come into force not
earlier than upon expiration of 5 (five) days after disclosure unless other effective date is determined by
the Moscow Exchange. The Bank of Russia verify the reliability of information contained in the documents
presented for registration. The Bank of Russia is obliged to register or refuse to register the document
subject to registration not later than 30 (thirty) days after the date of receipt of such document.
(6) The extent to which the regulatory regime/authority reviews and/or approves futures, option
or swap contracts prior to their being listed for trading
In the Russian Federation, a new derivative contract may be launched on an organized market only after
the Bank of Russia reviews and approves the specifications of such contract. The specification of the
derivative contract must contain particularly:
1. a contract type;
2. rules of contract code formation;
3. underlying asset(s);
4. a procedure for determining the first and the last trading days on which the contract may be
executed;
5. a procedure for determining an amount of money (variation margin) to be paid if an asset price
(value) changes;
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 Exhibit F(2)

6. a procedure for obligations under a contract to be fulfilled and discharged.

The items 3-4 that are mentioned above may be determined by the organizer of trading; the items 5-6 –
by the clearing organization.
Option specifications must specify also the procedure for determining the date on or a period during
which either party may claim fulfillment of obligations under the option. The organizer of trading may
include additional requirements in the specifications.
The Russian legislation recently introduced the concept of “unified specification” (effective as of February
3, 2013). Under this new procedure, an exchange may submit a unified specification for several different
derivative financial instruments, and having different basic assets, if such instruments have equal terms
(e.g., type of the derivative contract; grounds, order of fulfillment and termination of obligations under the
derivative contract; order of delivery and payment for the basic asset for deliverable agreements; liability
of the parties for non-fulfillment of obligations; consequences of introduction of modifications and
alterations to the specification of the derivative contract, and procedure of entry into force of the
respective modifications and alterations). The Moscow Exchange partially migrated to unified contract
specifications in September 2013 (first were registered specifications for Single Stock Futures on Russian
shares).
In general, the procedure for launch of a new derivative contract consists of the following stages:
1. Adoption of decision on the necessity of launch of a new derivative contract. Initiative of launch of a
new contract may belong to the executive directorate of the Moscow Exchange, Derivatives Market
Committee and its members, Settlement Entities.
2. Development of the draft specification of the derivative financial instrument. Specification is
developed in accordance with the requirements of the current legislation and internal documents of
the Bank of Russia.
3. Review of the draft specification and size of the Moscow Exchange and clearing charge is performed
by the Derivatives Market Committee. Further development of the specification in accordance with
the recommendations of the Derivatives Market Committee.
4. a) Approval of sizes of the Moscow Exchange and clearing charge by the Derivatives Market
Committee and submission for consideration to the Tariff Policy Committee. Decisions of the
Derivatives Market Committee and Tariff Policy Committee are submitted for approval of the
Supervisory Board of the Moscow Exchange and Supervisory Board of the clearing center (NCC) 16
respectively.
b) Text of specification concurrently approved by the Derivatives Market Committee is recommended
(submitted) for approval be the Executive Board of the Moscow Exchange.
5. a) Approval by the Executive Board of the Moscow Exchange of the text of specification.
b) Approval of the size of the Moscow Exchange and clearance charge by the by the Supervisory
Board of the Moscow Exchange and NCC.
6. Review by the Working Group on Risks and the Derivatives Market Committee of the issue on the
basic amount of collateral. Positive result of review of the said issue is adoption at the meeting of the
committee of recommendations for the Executive Board of the clearing center (NCC) on
establishment of the respective basic amount of the collateral.
7. Introduction into circulation in the system of training trading of the new contract for provision of
possibility to the Settlement Entities to familiarize with the new instrument. Testing of the trading,
clearing and monitoring systems and system of distribution of the market data with respect to the
new instrument.
8. The Moscow Exchange sends the specification documents (application, text of specifications,
document with introduction of modifications and alterations to the specification, extract from the
minutes concerning the decision of the Executive Board of the Moscow Exchange, state duty
payment receipt) to the Bank of Russia.
9. Registration of specification with the Bank of Russia (maximum term of registration established by
the legislation is 30 calendar days). The responsible officer of the Bank of Russia examines the

16
Information on the clearing fees is contained in the NCC’s Clearing Rules, modifications to which are also introduced and
submitted to the Bank of Russia for registration of the new version of the rules.

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presented set of documents for completeness and reliability of information, for compliance with the
Russian legislation on the securities market, detects, whether there are any contradictions with the
internal documents of the Moscow Exchange (for example, Trading Rules, Clearing Rules).
10. Disclosure on the Moscow Exchange’s website of the text of specification, applicable charges and
basic amount of collateral after registration of the specification with the Bank of Russia.
11. Adoption by the Moscow Exchange’s Chairman of the Executive Board of the decision on the
admission to trading of the respective derivative contract (however, according to the current
legislation and internal documents of the Moscow Exchange the trading in a new instrument may not
be started prior to expiration of 3 working days after the disclosure on the Moscow Exchange’s
website of the text of specification of the respective derivative contract).
(7) The regulatory regime/authority’s approach to the detection and deterrence of abusive
trading practices, market manipulation, and other unfair trading practices or disruptions of
the market
The general approach of the Russian regulation to detection and termination of unfair trading practices,
market manipulation and other methods of market disruption is contained in the Federal Law No.224-FZ
“On Counteracting illegal use of inside Information and Market Manipulation”. The law defines a
manipulation as actions as a result of which the price, demand, the offer or a trading volume of a financial
instrument, foreign currency and (or) goods deviated level or were supported at the level significantly
different from that level which would be created without implementation of such actions. The ban on
implementation of such actions contains there. The law defines data which belong to insider information
and restrictions on its use, the order of its disclosure and granting are defined. The law defined also
measures for prevention, identification and suppression of a misuse of insider information and (or) a
manipulation by the market and consequences of a misuse of insider information and a manipulation by
the market for persons and the organizations are established.
See Exhibit A-5 of the FBOT Application for more information.

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 Exhibit F(3)

Exhibit F(3)
A description of the laws, rules, regulations and policies that govern the authorization and ongoing
supervision and oversight of market intermediaries who may deal with members and other participants
located in the United States participants, including:
(1) Recordkeeping requirements
The organizer of trading must maintain a Register of Orders submitted by Trading Participant, as well as a
Register of Trades executed at the Moscow Exchange.
The Register of Orders should contain the following information:
 the identification code of the order;
 the unique order code (can be the same with identification code of order);
 the Trading Participant Code (including the code of Traiding Participant’s Client (Clients), for or on
behalf of which the order was submitted;
 the Clearing Broker Code (if the order submitted with such indication)
 an indication that the order was submitted in discharge of obligations of the market maker (if
applicable);
 the kind of the order;
 the terms and conditions of the order, including the number of contracts, with respect to which the
order was submitted (number of contracts, with respect to which the order was submitted for each
client, if the order was submitted for or on behalf of several clients);
 the date and time of registration of the order;
 the date and time of execution (withdrawal) of the order;
 the result of submitting of the order (executed, partly executed, withdrawn, revoked, etc.);
 the reason of revocation of the order.
The Register of Trades should contain the following information:
 the standard conditions of trades (except for the price, categories (types), series of securities);
 the identification numbers of orders, on the basis of which the transaction was conducted;
 the identification number of the trade;
 the date and time of registration of the trade;
 the codes of Trading Participants that conducted the trade (in case of conducting of trade in
accordance with the rules of holding of trading with the clearing agency — code of the Settlement
Entity that conducted the trade and indication that the trade was conducted with the clearing
agency), including codes of clients of the Trading Participants, for or on behalf of which the trade
was conducted, and codes of the clients of brokers (administrators) being the clients of Settlement
Entities, for or on behalf of which the trade was conducted;
 the title (code) of financial instrument (type of contract and the object of a contract). If the financial
instrument is a security – the issuer’s title, type, category and series of the financial instrument
being the subject matter of the trade;
 the price of a single financial instrument;
 the number of financial instruments, including the number of financial instruments for each client, if
the trade was conducted for or on behalf of several clients;
 the amount of the trades.
All information on the course of trading, as well as on orders, trades, state of accounts, positions and
other important information is transmitted on a real-time basis to the Settlement Entity through the trading
system (trading terminal, gateway or other informational channels). After the end of a trading session, the
Moscow Exchange provides the Trading Participants with the information on the trades conducted during
the trading day (Register of Trades). According to the results of the clearing session, the NCC also
prepares the reports containing information on the concluded trades, information on the open positions
broke down by instruments, sizes of obligations (variation margin) and requirements to the collateral. A
complete list of reports is fixed by the rules of the NCC.
A Trading Participant is obliged to provide reports to its client because the Trading Participant acts as the
intermediary (broker) on the basis of the commission (engagement) or agency agreement for the benefits
of the client (agreement for brokerage services) in accordance with the requirements of the Civil Code of
the Russian Federation and special standards for maintenance of the internal accounting of trades,
including derivatives trades by professional participants of the securities market performing brokerage,
dealer and trust management activities established by the Bank of Russia (Regulations No.32 ‘On

77

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 Exhibit F(3)

procedures for maintenance of the internal accounting of trades, including derivatives trades’). The
reports of the broker are sent to the clients on a daily basis at the end of the trading day. The report of the
Settlement Entities to the client contains information on: the executed trades, borrowed funds, state of the
account, margin level, and amount of obligations, among other things.
(2) Protection of the customer funds. Procedures for dealing with the failure of a market
intermediary in order to minimize damage and loss to investors and contain systemic risk
The NCC assumes responsibility for protection of customer funds. (See Exhibit E(3)(vii) of Addendum S-1
to the FBOT Application).
Operating procedure in case of bankruptcy/default of a Settlement Entity. Operating procedure of
the NCC in case of insufficiency of securities and/or monetary funds for securing the obligations
under the Derivative contracts
1. If a Clearing Member is indebted to the Settlement Entity (hereinafter referred to as a “Debtor
Settlement Entity”) according to the results of the current day or the evening clearing session and
subject to the existence of positions recorded on the sections of the position register of the
Ordinary or Separated Broker Entities or Segregated Broker Entities, under which there is
indebtedness, opened within the Debtor Settlement Entity (the “Indebtedness Positions”), the
Clearing Member shall be obliged not later than forty five (45) minutes prior to beginning of the next
day or evening clearing session to redeem the said indebtedness. The Clearing Member having
indebtedness to the Settlement Entity is hereinafter referred to as the “Debtor”.
2. Suspension of admission to trading
If the Debtor failed to redeem indebtedness to the Debtor Settlement Entity within the time limit
prescribed in accordance with clause 1, the Clearing Center:
 sends notification to the Exchange of the necessity to suspend the possibility of conclusion of
the derivative contracts in the name of the Debtor using the codes of Ordinary Broker Entities,
as well as Segregated Broker Entities, under which there is indebtedness, opened within the
Debtor Settlement Entity;
 subject to the existence in the trading system of the Exchange of active orders submitted in
the name of the Debtor using the code of the Ordinary or Separated Broker Entity or
Segregated Broker Entity, under which there is indebtedness, opened within the Debtor
Settlement Entity, the Clearing Center sends to the Exchange the instruction to delete these
orders.
Starting with moment of sending of the notification, the Clearing Center applies to the Debtor the
procedure for the mandatory closing of positions under the code of the Debtor Settlement Entity in
accordance with the procedure described in the following article.
3. Use of the non-ruble assets from the collateral for redemption of indebtedness
If the Debtor had no Indebtedness Positions registered by the Clearing Center or all Indebtedness
Positions were closed due to the procedure for the mandatory closing of positions, and the Debtor
is indebted under the Debtor Settlement Entity, the Clearing Center adopts the decision:
 on the use of foreign currency recorded as the means of collateral of this Debtor Settlement
Entity for the purposes of redemption of indebtedness under the Debtor Settlement Entity,
and/or
 on transfer of securities recorded as the means of collateral of this Debtor Settlement Entity to
the depositary account of the Clearing Center with the Clearing Depository for the purposes of
redemption of indebtedness under the Debtor Settlement Entity (hereinafter referred to as the
use of securities for redemption of indebtedness).
Use of foreign currency and securities for redemption of indebtedness under the Debtor Settlement
Entity is performed in accordance with the procedure specified in Appendix No. F2 to the Clearing
Rules.
4. Renewal of admission to trading
If the indebtedness to the Debtor Settlement Entity is redeemed as a result of actions specified in
clauses 2 or 3, the Clearing Center sends notification to the Exchange of possibility to execute
derivative contracts in the name of the Debtor using this code of the Debtor Settlement Entity.

78

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 Exhibit F(3)

If the indebtedness of the Segregated Broker Entity, opened within the Debtor Settlement Entity is
repaid as a result of the actions specified in clauses 2, 3, but still exists indebtedness under the
Debtor Settlement Entitythis occurs when the loss-making positions are opened on the clearing
registers of the Settlement Entity but not on the clearing registers of the Segregated Broker Entity.)
the Clearing Center sends notification to the Exchange on provision of possibility to execute
derivative contracts in the name of the Debtor using this code of this Segregated Broker Entity.
5. Use of guarantee funds in case of insufficiency of the owned assets of the Clearing Member
If after execution of actions specified in clauses 2 and 3, the Debtor still has indebtedness to the
Debtor Settlement Entity, then the Clearing Center may decide whether to use the funds of
insurance or reserve funds to cover such indebtedness in accordance with the procedure
established by the Regulations for the insurance and reserve funds, which is Appendix No. F8 to
the Clearing Rules (hereinafter referred to as the clearing session of using of funds).
Subject to the existence of positions under the derivative contracts recorded on the sections of the
position register of the Segregated Broker Entities opened within the Debtor Settlement Entity, the
specified positions should be closed by the Debtor within two settlement periods following the
clearing session of using of funds.
If the insurance and reserve funds are not sufficient to cover the indebtedness, the Clearing Center
sends notification to the Exchange on the necessity to suspend the possibility of execution of the
derivative contracts in the name of the Debtor using the code of the Debtor Settlement Entity.
From the moment of sending said notification, the Clearing Center begins closing all positions
under derivative contracts recorded on the sections of the position register of the Segregated
Broker Entities opened within the Debtor Settlement Entity in accordance with the procedure
established by the procedure for the mandatory closing of positions.
6. Procedure for the mandatory closing of positions
Actions performed by the Clearing Center during the procedure for the mandatory closing of
positions of the Debtor Settlement Entity are performed up to the moment of redemption of the said
indebtedness or up to the closing of all positions of the Debtor Settlement Entity to be closed After
each action performed in accordance with the above, occurs the check of repayment of the
indebtedness .
Closing/opening of positions recorded on the sections of the segregated broker entity registered
within the Debtor Settlement Entity is possible only subject to the existence of indebtedness under
this segregated broker entity and is performed up to the moment of its redemption.
7. Procedure for closing of positions
In order to reduce indebtedness Clearing Center shall close opposite positions under the Debtor
Settlement Entity. The sequence of closing positions is as follows:
a. a pair of opposing positions, each of which is accounted on the clearing register of the Broker
Entity, which has an indebtedness;
b. a pair of opposing positions, one of which is accounted on the clearing register of the Broker
Entity, which has an indebtedness, and the other position is accounted on the clearing register
of the usual Broker Entity;
c. a pair of opposing positions on futures contracts, each of which is accounted on the clearing
register of the usual Broker Entity.
Clearing Center unilaterally performs termination of obligations constituting the pairs of counter
positions under the derivative contracts defined in accordance with this clause. In this regard, for
each pair of counter positions under the derivative contracts the obligations with respect to the
derivative contracts are terminated in the amount equal to the smaller of the sizes of the said pair
of positions.
8. Procedure for opening of positions for the purposes of redemption of indebtedness
The Clearing Center defines the positions under the derivative contracts, opening of which on the
sections of the position register of the Debtor Settlement Entity will result in reduction or
redemption of indebtedness under the Debtor Settlement Entity (the “Redemption Position”), and
the size of their increase (the “Size of the Redemption Position”).

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 Exhibit F(3)

For the purposes of opening of the Redemption Position, the Clearing Center prior to expiration of
the settlement period following the moment of beginning of the procedure of the mandatory closing
of positions (the “Redemption Period”) executes derivative contracts (“Derivative Redemption
Contracts”) in the trading system of the Exchange, obligations under which are opposite to the
obligations comprising the Redemption Position, and the number of the said derivative contracts
does not exceed the size of the Redemption Position. In executing the Derivative Redemption
Contracts, it is recognized that the derivative contract is executed between the Clearing Center and
the Debtor, the terms and conditions of which coincide with the terms and conditions of the
Derivative Redemption Contracts (hereinafter referred to as the derivative contract of opening of
position).
9. Procedure for opening of the position for the purposes of redemption of indebtedness
The Clearing Center defines the positions under the derivative contracts recorded on the sections
of the position register of the Debtor Settlement Entity, which are subject to closing prior to
expiration of the Redemption Period (hereinafter referred to as the positions of the mandatory
closing), and the sizes of their decrease (hereinafter referred to as the sizes of positions of the
mandatory closing).
For the purposes of closing of the position of mandatory closing under the derivative contracts, the
Clearing Center, prior to expiration of the Redemption Period, concludes derivative contracts in the
trading system of the Exchange, obligations under which are unidirectional with the obligations
comprising the position of the mandatory closing under the derivative contracts, and the number of
the said derivative contracts does not exceed the size of the position of mandatory closing under
the derivative contracts (hereinafter referred to as the derivative contracts of the mandatory closing
of the position). When concluding the derivative contracts of the mandatory closing of the position,
the Clearing Center unilaterally terminates obligations under the derivative contracts comprising the
position of the mandatory closing under the derivative contracts within the scope of concluded
derivative contracts of the mandatory closing of the position.
10. Redemption of indebtedness after the expiration of the settlement period
The Clearing Center determines defaulting Clearing Member’s positions that must be closed out
after the end of the Settlement period for debt repayment (liquidating positions).
Tо close out the liquidating position we assume that the Clearing Center and a non-defaulting
Clearing Member have executed Derivatives contracts and obligations under such contracts are in
the same direction as obligations under the liquidating position as well as the number of said
Derivatives contracts equals the size of the liquidating position under the Derivatives contracts
(hereinafter the Derivatives contracts). Derivatives contracts serving to liquidate the position are
executed on the following conditions:
 a Clearing Member with the net position under the Derivatives contracts being opposite to the
liquidating position shall be a party to the contracts;
 price of futures serving to liquidate the position to which the Clearing Member is a Buyer shall
be the Lower limit of price fluctuations range set for trades in this futures by the end of the
Settlement period of debt repayment;
 price of futures serving to liquidate positions to which the Clearing Member is a Seller shall be
the Upper limit of the price fluctuations range set for trades in this futures by the end of the
Settlement period of debt repayment.
The Clearing Center terminates obligations under the liquidating positions under the Derivatives
contracts unilaterally.
11. Accrual of compensatory payments
Whenever the Clearing Center unilaterally terminates obligations under the mandatory closing out
positions or liquidating positions under the Derivatives contracts, it calculates and transfers
compensations of the defaulting Clearing Member during the next clearing session following the
Settlement period of debt repayment, in accordance with the procedure of calculation and transfer
of variation margin under the Derivatives contracts that took place during the clearing session.

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 Exhibit F(4)

Exhibit F(4)
A description of the regulatory regime/authority’s inspection, investigation and surveillance powers; and
the program pursuant to which the regulatory regime/authority uses those powers to inspect, investigate,
and enforce rules applicable to the Foreign Board of Trade.

As a part of exercising of control over the organizers of trading in accordance with the Federal Law
No.325-FZ “On Organized Trading”, the Bank of Russia eligible to17:
1. carry out scheduled inspections on an annual basis;
2. carry out unscheduled inspections in case of detection of features of violations, including on the
basis of complaints (claims, applications) or information obtained from the mass media;
3. request documents and information from the organizers of trading and their employees, including
information, access to which is limited or restricted in accordance with the federal laws,
explanations in written or oral form;
4. in accordance with the procedure established by the legislation of the Russian Federation, address
to the authorities performing investigative activities with a request to carry out investigative
measures.

Before the conduct of the inspection over the organizers of trading, the Bank of Russia should provide the
authority’s certificates and resolution of the authority’s head (deputy head) authorizing the conduct of the
inspection. After that, the Bank of Russia employees have the right of unimpaired access to premises of
the organizer of trading, as well as to premises of other organizations engaged by the organizer of trading
for execution of its obligations under the agreement for rendering of services for the organized trading
holding.

The Bank of Russia may request in written form from the organizers of trading and other individuals and
legal entities the documents and information connected with the organized trading holding, and the said
persons and entities are obliged to provide such documents and information. In this respect the Bank of
Russia is obliged to ensure confidentiality of the presented documents and information, except for the
cases of disclosure (provision) of information in accordance with the Federal Laws and regulatory legal
acts of the Russian Federation adopted in accordance with them.

As a result of conducted inspection the Bank of Russia can reveal administrative violations on which
according to the Code of the Russian Federation “On Administrative Offenses” the protocol is formed and
administrative penalties are imposed. If the Bank of Russia detects the facts that can be qualified as a
criminal cases, the Bank of Russia addresses to the authorities performing investigative activities with a
request to carry out investigative measures.

If the Bank of Russia detects any violations of the Federal Laws and regulatory legal acts adopted in
accordance with them, it may suspend for a period of up to 6 (six) months or terminate the organized
trading holding in the following cases:

1. detection of violations of the Federal Laws and regulatory legal acts of the Bank of Russia adopted
in accordance with them or rules of the organized trading, including in case of failure of the
organizer of trading to fulfill an obligation on suspension or termination of the organized trading
established by the Federal Laws and regulatory legal acts of the Bank of Russia adopted in
accordance with them or rules of the organized trading;
2. failure of the organizer of trading to execute the instruction of the Bank of Russia;
3. detection of violation by the organizer of trading of the rights and legitimate interests of investors or
in case of creation of menace to the rights and legitimate interests of investors by the actions
performed by the organizer of trading;
4. other cases prescribed by the Federal Laws.

Instructions may be changed or canceled by the Bank of Russia. An instruction from the Bank of Russia
may be disputed in the arbitration court. Filing of application to the arbitration court on declaring the
instruction invalid in full or in part does not suspend the effect of the instruction.

17 According to part 2 of Article 25 of the Federal Law No.325-FZ “On Organized Trading” the Bank of Russia has the right to carry
out planned inspections not more often than once a year. Unscheduled inspections can be carried out in case of detection of signs
of violations. For example, such inspections are carried out in case of technical failures at the organizer of trading.

81

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 Exhibit F(5)

Exhibit F(5)
For both the Foreign Board of Trade and the Clearing Organization (unless addressed in Supplement S–
1), a report confirming that the Foreign Board of Trade and clearing organization are in regulatory good
standing, which report should be prepared subsequent to consulting with the regulatory regime/ authority
governing the activities of the Foreign Board of Trade and any associated Clearing Organization.
See Supplement S-1 to the FBOT Application.
We are in process of discussing this issue with the Bank of Russia

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 Exhibit F(6)

Exhibit F(6)
For both the Foreign Board of Trade and the Clearing Organization (unless addressed in Supplement S–
1), a confirmation that the regulatory regime/ authority governing the activities of the Foreign Board of
Trade and the Clearing Organization agree to cooperate with a Commission staff visit subsequent to
submission of the application on an “as needed basis,” the objectives of which will be to, among other
things, familiarize Commission staff with supervisory staff of the regulatory regime/authority; discuss the
laws, rules and regulations that formed the basis of the application and any changes thereto; discuss the
cooperation and coordination between the authorities, including, without limitation, information sharing
arrangements; and discuss issues of concern as they may develop from time to time (for example, linked
contracts or unusual trading that may be of concern to Commission surveillance staff).
[To be completed]

83

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 Exhibit G-2

Exhibit G — The Rules of the Foreign Board of Trade and enforcement thereof
Exhibit G-1
A description of the Foreign Board of Trade’s regulatory or compliance department, including its size,
experience level, competencies, duties and responsibilities.
The Moscow Exchange’s internal compliance department is the Internal Control Service (“ICS”), which is
independent in its activities from other structural subdivisions of the Moscow Exchange. Management of
the ICS is performed by the Head of the Internal Control Service, Deputy Chairman of the Executive
Board, who is the deputy director of the Moscow Exchange by virtue of his/her position. At the present
time the number of employees of the ICS is 6 (six).
For the purposes of exercise of internal control, the ICS performs the following functions:
1. conduct control over observance by the Moscow Exchange of the requirements of the legislation of
the Russian Federation on the financial market, including regulatory legal acts of the federal
executive body on the financial market, legislation of the Russian Federation on protection of rights
and legitimate interests of investors on the financial market, legislation of the Russian Federation on
advertisement and internal documents of the Moscow Exchange;
2. performs random inspections to monitor compliance with the requirements of the legislation of the
Russian Federation on the financial market, including regulatory legal acts of the federal executive
body on thefinancial market, legislation of the Russian Federation on protection of rights and
legitimate interests of investors on the financial market, legislation of the Russian Federation on
advertisement and internal documents of the Moscow Exchange, specifically:
 observance of conditions of orders of the clients of the Moscow Exchange;
 organization and performance of continuous monitoring of prices, volumes and other
characteristics of the registered orders and transactions during the trading day for the purposes
of detection of off-standard transactions (orders);
 carrying out of inspections of the nonstandard trades/orders and submission of the results of
inspections to the Bank of Russia;
Monitoring and control of the submitted orders and trades in the process of execution (with the
purpose of identifying nonstandard trades/orders) is performed on on-going basis by a specially
designated unit of the Exchange. It includes automated monitoring and control using software and
hardware assuring prevention, identification and preclusion of insider information abuse and/or
market manipulation.
The following cases shall be qualified as nonstandard trades/orders:
 identification of trades/orders with terms and parameters falling within the exceptions criteria
(combination of criteria) set by the internal regulatory documents of the Exchange;
 identification of trades associated with market manipulation, as well as with violation of
regulations on mandatory actions in case of conflict of interest or insiders information abuse;
 identification of non-compliance with the laws on organised trading and with the internal
documents of the Exchange regulating organisation and conducting of trading at the
Exchange.
Criteria to be used for nonstandard trades/orders identification are established in accordance with
the internal regulatory documents of the Exchange.
For the purpose of nonstandard trades/orders identification the Exchange experts check trades and
orders with regards to insider information abuse and/or market manipulation, as well as for
compliance with the internal regulatory documents of the Exchange.
In case actions by Trading Participants and other participants have certain parameters of market
manipulation, conflict of interests, insider information abuse or non-compliance with the internal
regulatory documents of the Exchange, and the causes for such actions need to be identified, the
Exchange is entitled to require all the necessary documents (including the ones the Trading
Participant received from the client), explanations and other related information – verbally and in
writing.
Based on the results of monitoring and control, the Exchange, if required, shall issue charges against
the abuser in accordance with the internal regulatory documents of the Exchange, as well as a report
on identified nonstandard trades trades/orders for the regulator.

84

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 Exhibit G-2

3. daily control over activities of market makers, periodic inspection of activities of the market makers
on all effected transactions;
4. observance of measures aimed at prevention of illegal use of the proprietary information in the
performance by the Moscow Exchange of professional activities on the financial market;
5. observance of measures on prevention of illegal use of insider information and market manipulation;
6. observance of measures aimed at prevention of the conflict of interests in the performance by the
Moscow Exchange of professional activities on the financial market, and in case of the conflict of
interests — observance of priority of interests of the client;
7. other requirements of the legislation of the Russian Federation on the financial market.
Reviews applications, claims and complaints received by Moscow Exchange connected with performance
by the Moscow Exchange of professional activities on the financial market.
The Moscow Exchange developed hardware and software to assist with this surveillance, which consists
of the following components:
1. software for exercise of the daily control over activities of the market makers. The software
monitors market makers’ obligations in regards to maintaining the spread, % of time that the
spread is maintained, and volume;
2. software for monitoring of prices, volumes and other characteristics of the registered orders and
transactions for the purposes of detection of nonstandard trades/orders;
3. software for performance, particularly, of auxiliary functions when carrying out inspections of the
nonstandard trades/orders;
4. service of automatic suspension/resumption of trading: functions of the software of the statistics
calculation server of the Moscow Exchange allowing to administer trading (introduce changes to
the settings of the software of the trading system) on the basis of the results of calculation and
analysis of changes of the stock index or current prices, which allows particularly to perform
procedures of control over transactions with securities and d conducted in the trading system.
Functions embedded in the software enable not only to calculate critical changes of the current
prices/stock index for suspension of trading in shares, but also to warn of the possibility of
occurrence of such events.
Similar functions are realized with respect to trading in the section of the derivatives market,
including for suspensions for the purposes of extension of limits of fluctuation of prices of
transactions due to activation of the specified criterion (availability for 15 (fiftheen) consecutive
minutes of at least one order for purchase (sale) of the futures contract with the price equal to the
upper (lower) limit of prices of transactions established for this futures contract). These functions
are realized as the module of AWS (automated workstation connected to Moscow Exchange’s
Trading System) of the trading administrator.
Once trading limits are reached and the market remains there for a period of 15 mins, all trading
will be suspended for 15 (fiftheen) minutes, during which the Exchange will widen the trading
limits. (For more info, please refer to the attached document: “trading limits.pptx”).
5. Module of control over execution of transactions
Monitoring and control over execution by the Settlement Entities of the obligation on provision of
the report on execution of transactions is realized by means of scripts analyzing data on
transactions effected on the Moscow Exchange. This complex enables the ICS to conduct
preventive measures for avoidance of nonobservance by the Settlement Entities of the time
periods for presentation of the report on execution of transactions, and in the event of commitment
of the above said violations — to carry out actions prescribed by the Derivatives Rules of
monitoring of provision of reports on execution of transactions and formation of the register of
unexecuted transactions.
The employees of the ICS within the performed functions must satisfy certain education requirements and
possess a certificate on the specialization corresponding to the type of activities on the financial market
performed by the Moscow Exchange.
The Internal Control personnel must have higher education (university degree) and at least 1 year of
professional experience in the respective field. The employees must have a qualification certificate for the
85

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 Exhibit G-2

discipline relevant for the type of activities performed by the Exchange in the financial market. The
qualification certificate is issued by the regulator subject to successful passing the respective exams.
The Internal Control personnel shall undergo advanced training courses at least once a year. Such
courses need to be delivered by organisations certified by the regulator for issuing professional
certificates to financial market specialists.

86

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 Exhibit G-2

Exhibit G-2
A description of the Foreign Board of Trade’s trade practice rules, including but not limited to rules that
address the following:
(1) Capacity of the Foreign Board of Trade to detect, investigate, and sanction persons who violate
Foreign Board of Trade rules.
The Disciplinary Panel was established within Moscow Exchange with the following objectives:
 to assure Trading Participants’ compliance with the internal documents of the Moscow Exchange
regulating organisation and conducting of trading and settlements, normal business practices when
performing professional activities, as well as to assure the protection of rights and lawful interests of
Trading Participants.
 to investigate conflicts between Trading Participants, as well as between the Moscow Exchange and
Trading Participants, which may arise in case of breach of the internal regulatory documents of the
Moscow Exchange or in relation to these documents, as well as in connection with Trading
Participants executing a trade (submitting an order) qualified as exception and a breach of the
internal regulatory documents of the Moscow Exchange.
To achieve the above listed objectives the Disciplinary Panel shall perform the following functions:
 assure standard principles are followed when enlisting Trading Participants;
 develop standard criteria for assessing the financial standing of all Candidates to Trading
Participants;
 assure all Candidates to Trading Participants observe internal documents of the company regulating
admission to trading;
 supervise the compliance of trading practices and the regulatory framework of different markets with
the overall interests of the Moscow Exchange;
 review the materials of investigation of cases of professional misconduct of Trading Participants both
at the Moscow Exchange and at OTC financial markets with the purpose of providing
recommendations to the Chairman of the Executive Board and CEO of the Exchange about issuing
charges against such Trading Participants;
 review conflicts between Trading Participants, as well as between the Moscow Exchange as
organizer of trading and Trading Participants, should such conflicts arise as the result of breaching
the internal documents of the Company by Trading Participants including breaching the trading and
settlement rules and procedures or in relation with those, as well as the result of professional
misconduct by Trading Participants and/or Candidates to Trading Participants both at the Moscow
Exchange and at the OTC market;
 should there be certain issues submitted for the Panel’s review or should the Panel initiate the
respective inquiry to the Chairman of the Executive Board and CEO of the Exchange, the Panel shall
review the following materials:
 proposals on granting new Trading Participants admission to trading;
 proposals on criteria for assessing the financial standing of Candidates to Trading Participants
and of Trading Participants;
 materials on Trading Participants’ performance with regards to their compliance with the
financial standing criteria stipulated by internal documents of the Exchange regulating the
issues of participation in trading;
 information about Trading Participants being in unsound financial standing and non-compliant
with the requirements of the internal regulatory documents of the Moscow Exchange, legal acts
of the Bank of Russia and of the federal agency authorised to perform as the regulator in
securities market, as well as other laws and regulations of the Russian Federation; or Trading
Participants failing to implement the decisions of the authorised Moscow Exchange
management bodies pertaining to admission to trading;
 materials of checks of exceptions (trades/orders);
 other materials submitted for the Panel’s review.
 based on the results of reviewing the exceptions the Panel shall decide on recommendations to the
Chairman of the Executive Board and CEO about issuing charges against Trading Participants being
parties to such trades (or having submitted such orders) in accordance with the Rules for granting
admission to trading;
 review, as instructed by the Chairman of the Executive Board and CEO, documents about including
Candidates into the Trading Participants list, as well as excluding Trading Participants from the
Trading Participants list, issue an opinion about the possibility of including Candidates into /

87

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 Exhibit G-2

excluding from the Trading Participants list to support the review of such issue by the Chairman of
the Executive Board and CEO.
 Submit issues pertaining to excluding Trading Participants from the Trading Participants list for the
review by the Chairman of the Executive Board and CEO according to the procedure and based on
the grounds stipulated by internal documents of the Moscow Exchange regulating participation in
trading.
The Moscow Exchange reviews information on the unfair conduct of participants on and off of the
Moscow Exchange through the disciplinary committee of the Exchange. Status, objectives and powers
are specified in the regulations for the committee on observation over the practice of the Moscow
Exchange’s activities (disciplinary committee of the Exchange) and risks of the Supervisory Board of the
Moscow Exchange.
This committee has jurisdiction over Trading Participants who violate the rules of conduct of trading and
settlements, other internal documents of the Moscow Exchange, regulatory legal acts of the Bank of
Russia and any other regulatory legal acts of the Russian Federation or in case of unfair conduct of the
participants of sections on the Moscow Exchange and off-exchange markets. The Moscow Exchange
may take the following disciplinary measures:
 issue of a warning and establishment of the term for elimination of the detected violations;
 issue a warning of the possible exclusion from the participants of the section;
 address to the Executive Board of the Moscow Exchange with the petition for suspension of
participation of the particioant of the section in trading; or
 address to the Supervisory Board of the Moscow Exchange with the petition for termination of
membership in the section with provision of information on it, if necessary, to all participants of the
section and respective government agencies.
In case of violation by the Trading Participant the procedure of use information setted out by Article 11 of
the Moscow Exchange's Trading Rules and Market Data Policy, the Trading Participant the can be
subject to one of the following:
 written notice (warning) of non-compliance;
 fine of two hundred thousand (250,000) rubles;
 suspension from trading for up to 12 months;
 termination of admission to trading.
Should its Client violate provisions mentioned above, the Trading Participant shall hold the Client
responsible through the following:
 written notice (warning) of non-compliance;
 suspension of Market Data from the Client as long as the Client remains not compliant as regards
the use of Market Data.
(2) Prohibition of fraud and abuse, as well as abusive trading practices including, but not limited to,
wash sales and trading ahead, and other market abuses.
Trading participants may not use insider information or engage in manipulative acts when conducting
transactions. Moscow Exchange rules for preventing, identifying and suppressing illegal use of inside
information and/or market manipulation were elaborated in accordance with the law of the Russian
Federation and regulatory acts of the Bank of Russia.
For the purposes of prevention, detection and preclusion of cases of illegal use of insider information
and/or market manipulation in the organization of trading in the derivative financial instruments and
exchange-traded commodities, the Moscow Exchange applies the following system of measures:
1. The Moscow Exchange conducts control over orders submitted to it and transactions with the
derivative financial instruments and exchange-traded commodities executed on the Moscow
Exchange, as well as over Settlement Entities, using the system of control complying with the
requirements of the regulatory legal acts of the Bank of Russia and other regulatory legal acts of
the Russian Federation, which provides for:
a. monitoring of trading, including by way of monitoring of trading for the purposes of detection of
the off-standard orders (transactions) and inspection thereof for commitment of actions having
features of illegal use of insider information and/or market manipulation.

88

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Insider information shall be understood as accurate and specific information not having been
disseminated or submitted (including data qualified as commercial secret, official secret, bank
secret, communication secret (pertaining to postal money transfers) and other secret
information protected by law), the dissemination or submission of which may substantially
affect prices of financial instruments, foreign currency and/or other goods.
Market manipulation shall be understood as follows:
 malicious dissemination through mass media including digital and telecom networks with
unlimited admission (including Internet) or through any other means of communication of
deliberate misrepresentations resulting in the situation when price, demand, supply or
trading volume for a certain financial instrument, foreign currency and/or other goods
deviated from the level or were maintained at the level substantially different from the
level they could be at should such malicious dissemination had not taken place;
 trading financial instrument, foreign currency and/or other goods based on preliminary
contract between Trading Participants and/or their employees and/or persons in the
interests of which such trading is made, resulting in the situation when price, demand,
supply or trading volume for a certain financial instrument, foreign currency and/or other
goods deviated from the level or were maintained at the level substantially different from
the level they could be at should such trading had not taken place. This clause shall
apply to organised trading based on orders to all Trading Participants in case information
about persons having submitted such orders and about persons in the interests of which
such orders were submitted is not disclosed to other Trading Participants;
 executing trades under which the obligations of the parties are discharged at the expense
or in the interests of one person resulting in the situation when price, demand, supply or
trading volume for a certain financial instrument, foreign currency and/or other goods
deviated from the level or were maintained at the level substantially different from the
level they could be at should such trades had not been executed. This clause shall apply
to organised trading based on orders to all Trading Participants in case information about
persons having submitted such orders and about persons in the interests of which such
orders were submitted is not disclosed to other Trading Participants;
 submitting orders at the expense or in the interests of one person resulting in
simultaneous contradictory orders in which the purchase price of a certain financial
instrument, foreign currency and/or other goods is either above or equal to the sell price
of the same financial instrument, foreign currency and/or other goods – in case trading
was made based on such orders resulting in the situation when price, demand, supply or
trading volume for a certain financial instrument, foreign currency and/or other goods
deviated from the level or were maintained at the level substantially different from the
level they could be at should such trading had not taken place. This clause shall apply to
organised trading based on orders to all Trading Participants in case information about
persons having submitted such orders and about persons in the interests of which such
orders were submitted is not disclosed to other Trading Participants;
 executing multiple trades during one trading day within organised trading at the expense
or in the interests of one person based on orders with the highest purchase price or the
lowest sell price of financial instrument, foreign currency and/or other goods as of the
moment of submitting such order, resulting in substantial deviation in their price from the
level it could be at should such trades had not been executed – with the purpose of
further executing reverse trades at the expense or in the interests of the same or another
person at such prices and further execution of such reverse trades;
 executing multiple trades during one trading day within organised trading at the expense
or in the interests of one person with the purpose of fraudulent misrepresentation of the
price of financial instrument, foreign currency and/or other goods resulting in the situation
when such price of financial instrument, foreign currency and/or other goods was
maintained at the level substantially different from the level it could be at should such
trades had not been executed;

89

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 multiple failure to discharge obligations under trades executed within organised trading
with the same financial instrument, foreign currency and/or other goods without bona fide
intent to execute them, resulting in the situation when price, demand, supply or trading
volume for a certain financial instrument, foreign currency and/or other goods deviated
from the level or were maintained at the level substantially different from the level they
could be at should such trades had not been executed. Such actions shall not be
qualified as market manipulation in case the obligations under the above described trades
were terminated on the grounds stipulated in the Rules of Trading Organiser and/or of
clearing organisation.
The criteria for substantial deviation of price, demand, supply or trading volume for a
certain financial instrument, foreign currency and/or other goods versus the level of price,
demand, supply or trading volume for the same financial instrument, foreign currency
and/or other goods they could be at without account of actions stipulated by the present
Article shall be established based on the type, liquidity and/or market value of such
financial instrument, foreign currency and/or other goods by the organizer of trading in
accordance with the Recommended Practice of the Bank of Russia.
b. control over Trading Participants exercised by collecting and analysing of financial and other
reporting and information prescribed by internal documents of the Moscow Exchange and
requirements of the regulatory legal acts of the Russian Federation.
2. For the purposes of control over submitting orders for conducting of transactions with the derivative
financial instruments, the Moscow Exchange may establish additional limitations for parameters of
orders, in case of exceeding of which the orders are not registered in the trading system, including:
 limits of price fluctuations;
 calculating price for the purposes of determination of the significant deviation of prices;
 minimum and/or maximum volume of the order; and
 limitation of the quantity of the Moscow Exchange-traded commodities expressed in lots and
indicated in the order.
The specified limitations are established by the Moscow Exchange. In this regard the list of
derivative financial instruments as well as of the categories of Trading Participants, for whom the
respective limitations are established, as well as other limitations, may be established. Additionally,
the Moscow Exchange may establish limitations for submitting a particular type of orders for
conducting of transactions with the derivative financial instruments.
The Moscow Exchange, at the request of the Bank of Russia, is obliged to continuously submit to
the Bank of Russia information on the course of trading in the derivative contracts, including the
information on the orders issued by the Trading Participants and trades conducted by them, as well
as other information prescribed by the Russian legislation and regulatory legal acts.
A special procedure is established for suspending and resuming of trading in the derivative
contracts on the Moscow Exchange in cases and in accordance with the procedure set forth in
Appendix No. 1 of the Moscow Exchange’s Rules of prevention, detection and preclusion of cases
of illegal use of insider information and/or market manipulation.
(3) A trade surveillance system appropriate to the Foreign Board of Trade and capable of detecting
and investigating potential trade practice violations.
1. Responsibilities for Trade Surveillance
Monitoring and control over the orders submitted on the Moscow Exchange and transactions executed on
the Moscow Exchange, including derivatives trades, is exercised by the control subdivision of the Moscow
Exchange including with the use of the automated monitoring and control system in accordance with the
regulatory legal acts of the Bank of Russia and internal documents of the Moscow Exchange.
Market surveillance is performed for the purposes of detection and prevention of cases of price
manipulation on the markets of Moscow Exchange, as well as conduct of transactions with the use of
proprietary information, illegal use of insider information or of cases of conflict of interests.
Monitoring and control over the orders submitted on the Moscow Exchange and transactions executed on
the Moscow Exchange, including derivatives trades, is exercised by the Moscow Exchange by criteria
established by the regulatory legal acts of the Bank of Russia and internal documents of the Moscow
Exchange, with consideration for the set parameters of the specified criteria (combination of criteria).

90

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 Exhibit G-2

The system of monitoring and controlling the submitted orders and executed contracts being derivative
financial instruments technically ensures the monitoring and controlling the following criteria:
 number of orders submitted /contracts executed by a Trading Participant (such contracts being
derivative financial instruments) during a set period of time;
 execution by a Trading Participant in its own interests during a set period of time of contracts
being derivative financial instruments at better prices (the lowest prices in case of purchasing
contracts and the highest prices in case of selling contracts) compared to prices for contracts
executed by this Trading Participant in the interests of its clients;
 execution by a Trading Participant in its own interests or in the interests of one and the same
client of a series of contracts being derivative financial instruments leading to price change along
the same lines;
 execution by Trading Participants of contracts being derivative financial instruments in which
these Trading Participants or their clients alternately perform as sellers and buyers (cross trades);
 multiple changes and withdrawals of orders by one Trading Participant such orders being
submitted by such Participant in its own interests or in the interests of one and the same clients;
 the share of contracts being derivative financial instruments executed by a certain Trading
Participant in the overall volume of contracts being derivative financial instruments executed
during one trading day exceeds the pre-set amount;
 the total value of contracts being derivative financial instruments executed by a Trading Member
during one trading day for a certain security deviates from the average value of contracts being
derivative financial instruments executed by the same Trading Participant for a pre-set value;
 trading volume for contracts being derivative financial instruments changes during a certain
period of time for a pre-set volume.
2. Method of Surveillance
The Moscow Exchange surveils the trading on its platform in various ways, including but not limited to:
 conducting control over orders submitted on the Moscow Exchange and over the execution of
transaction on the Moscow Exchange, including by way of setting of limits for deviation of prices
of issued orders on particular instruments;
 continuously tracking the trading day prices, volumes and other characteristics of orders and
transactions registered by the Moscow Exchange;
 detecting in the course of monitoring and subsequent examination of orders and transactions,
price and volume of which or other conditions, including with consideration for the previous orders
and transactions, correspond to the criteria of the nonstandard trades/orders or combinations of
the criteria;
 terminating or suspending trading in a security or derivative financial instrument in cases
prescribed by the regulatory legal acts of the Bank of Russia and documents of the Moscow
Exchange. Trading may be suspended in case of circumstances which are disturbing or may be
potentially disturbing normal trading practices. In particular such circumstances include:
 malfunction of technical means for trading (including software malfunction);
 attempts of unauthorised access to trading technical means;
 malfunction of communications and power supply systems;
 force majeure;
 impossibility of proper functioning of the Clearing Centre and/or other organisations the
performance of which affects the possibility of trading.
Trading may be suspended due to physical impossibility of trading or by the decision of the
Exchange.
Trading may be suspended fully or in part.
Deadlines set for disclosing information about suspension of trading:
 in case trading was suspended due to malfunction of technical trading means, the Exchange
shall disclose this information no later than after 15 (fifteen) minutes after identifying such
malfunction.
 In case trading was suspended by the decision of the Exchange, the Exchange shall
disclose this information immediately after decision on suspension was made.

91

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 Exhibit G-2

 submitting information to the Bank of Russia on a daily basis regarding all orders submitted and
executed with separate submission of information of transactions (orders) corresponding to the
criteria of the nonstandard trades/orders or combinations of the criteria;
 submitting to the Bank of Russia results of conducted examinations for presence in the actions of
participants of the trading and their client of the facts of price manipulation.
For detection of the nonstandard trades/orders the Moscow Exchange uses proprietary software, which
analyses trading in securities and derivative financial instruments held on the Moscow Exchange and
issues alerts on the presence of features of the nonstandard trading activity. The parameters of the
criteria used for detection of the nonstandard orders/trades are set by the Moscow Exchange depending
on the period of the trading day, section, trading mode and type of the derivative contract. The
parameters of the criteria may be also set by the Moscow Exchange for different groups of derivatives
determined by the Moscow Exchange and included in the table of criteria of the nonstandard trades. The
Moscow Exchange may also utilize additional criteria or combination of criteria for trades/orders that are
qualified as nonstandard.
For the purposes of monitoring and controlling the closing price, current price, and volume of trading in a
derivatives contract and share of the transactions executed by a participant of the trading in this volume
are performed by the Moscow Exchange separately by transactions concluded on derivatives market of
the Moscow Exchange. Nonstandard orders and trades are examined by the Moscow Exchange in
accordance with the procedure established by it for:
 market manipulation and violations of requirements on mandatory actions in cases of
occurrence of the conflict of interests or for illegal use of insider information; and
 violations of internal documents of the Moscow Exchange.
3. An audit trail that captures and retains sufficient order and trade-related data to allow the
compliance staff to detect trading and market abuses and to reconstruct all transactions
within a reasonable period of time.
The audit trail information is stored electronically. All changes to orders are reflected in the order log.
Information from the order log is archived and kept permanently, so it is certainly possible to reconstruct
all transactions within a reasonable, or even any, period of time.
All orders/trades are to be stored at least 5 years from their entry/execution date. See also Exhibit G-4 of
the FBOT Application.
4. Appropriate resources to conduct real-time supervision of trading.
The Moscow Exchange created a specific division and an automated system to ensure continuous
monitoring of prices, volumes and other parameters of orders and trades (hereinafter referred to as the
monitoring and control system) registered during the trading day. The monitoring serves to identify
irregular trades (orders) implying market manipulation and using insider information. The monitoring and
control system ensures sufficiency of resources for control of conduct of trading sessions in the real-time
mode. See also Exhibit G-1 of the FBOT Application.

5. Sufficient compliance staff and resources, including those outsourced or delegated to third
parties, to fulfill regulatory responsibilities.

The Moscow Exchange created divisions for internal control which comprise the Internal Control Sub-
division and Securities Market Transactions Control (5 employees).The Internal Control Service (ICS) is
managed by the Service’s director. Monitoring and control system ensures sufficient number of
employees and volume of resources for fulfillment of functions of the ICS. See also Exhibit G-1 of the
FBOT Application.

The responsibilities of each division:

a. Securities Market Transactions Control (2 employees)

Exercising internal control over the Exchange compliance with the requirements of the Russian
Federation legislation on securities market and on protecting rights and lawful interests of investors.

b. Internal Control Sub-division (3 employees)

92

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 Exhibit G-2

 Control over transactions in financial instruments, foreign currency and/or other goods executed
within organised trading with the purpose of preventing, identifying and precluding insider
information abuse and/or market manipulation.
 Control over exceptions (trades and orders) with regard to insider information abuse and/or
market manipulation.
 Control over issuing reports on identified exceptions (trades and orders) as of each trading day
closure and on the results of checks performed.
6. Rules that authorize compliance staff to obtain, from market participants, information and
cooperation necessary to conduct effective rule enforcement and investigations.
Moscow Exchange compliance staff are authorized to monitor trading for purposes of detecting market
manipulation, occurrence of the conflict of interests, and occurrence of cases of illegal use of insider
information. Compliance staff may perform negotiations with the authorized representatives of the Trading
Participant (particularly, using means of the telephone communications providing for possibility of
recording of conversations), and have the right to send a request to Settlement Entities requesting the
presentation of documents and information directly or indirectly concerning such a situation.
If staff detect an nonstandard trades/orders, the Moscow Exchange may send a request by a registered
mail with notification of the delivery to the participant of the trading, requesting documents and
information directly or indirectly concerning orders or transactions and disclosing the reasons for effecting
the nonstandard trade or submitting the order (including the instructions of the client of the participant of
the trading, on the basis of which the order was filed, if the order was filed under the instruction of the
client; agreement with the client, on the basis of which the respective instruction was provided;
explanations of the client).
If, within 15 (fifteen) working days from the date of receipt of the official request, the Trading Participant
does not respond or does not provide written explanation of actions committed by it, then materials of the
examination may be submitted for consideration of the President of Moscow Exchange for review of the
issue on application to the participants of the trading of retaliation in accordance with internal documents
of the Moscow Exchange.
If during the check of an nonstandard trades/orders it was identified that the Exchange authorities are not
sufficient for validating the legitimacy of an exception or if there are some counteractions against the
check, the Exchange shall forward all the available materials on such exception to the federal executive
body in the sphere of financial markets.
The Moscow Exchange notifies the Bank of Russia of any such potential violation by a Trading Participant
of the internal documents of the Moscow Exchange not later than the next day after adoption of the
respective decision.
7. Staff investigations and investigation reports demonstrating that the compliance staff
investigates suspected rule violations and prepares reports of their finding and
recommendations.
If there is a suspected rule violation Moscow Exchange, an inspector presents to the Supervisory Board
and/or head of the professional participant reports on examination of the detected violation by the
Moscow Exchange of the requirements of the legislation of the Russian Federation including regulatory
legal acts of the Bank of Russia and internal documents of the Moscow Exchange (Report on inspection
of violation). The report is presented by the inspector not later than 2 (two) working days after the day of
completion of the inspection and should contain the following information:
 the grounds for inspection and time periods of its conduction;
 confirmed violations and other violations of the legislation of the Russian Federation, including
regulatory legal acts of the federal executive body on the securities market and internal documents
of the Moscow Exchange, discovered in the course of inspection;
 established causes of commitment of the violation and persons guilty thereof;
 suggestions and recommendations on elimination of the violation and prevention of similar violations
in the following operation of the Moscow Exchange.
A quarterly report of rule violations is provided to:
 The Chairman of the Executive Board of the Moscow Exchange within 10 working days from the date
of end of the reporting quarter;

93

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 Exhibit G-2

 The Supervisory Board of the Moscow Exchange for consideration at the meeting of the Supervisory
Board of the Moscow Exchange nearest after preparation and presentation of the report to the
Chairman of the Executive Board of the Moscow Exchange.
A quarterly report should contain the summarized information:
 inspections carried out during the quarter with indication of the information on the number of
conducted inspections and number of violations of requirements of the legislation of the Russian
Federation, including regulatory legal acts Bank of Russia and internal documents of the Moscow
Exchange, detected in connection with these inspections and reasons for commitment of the
detected violations;
 the measures taken to eliminate the detected violations and recommendations on prevention of the
similar violations of the requirements of the legislation of the Russian Federation, including
regulatory legal acts and internal documents of the Moscow Exchange in the following operation of
the Moscow Exchange;
 the results of consideration of applications, claims and complaints (on the number of considered
applications, claims and complaints, on the violations of the requirements of the legislation of the
Russian Federation, including regulatory legal acts of the Bank of Russia and internal documents of
the Moscow Exchange, detected according to the results of consideration of these applications,
reasons for commitment of the respective violations, on the assumed measures on elimination and
prevention of the similar violations in the following operation of the Moscow Exchange);
 observance of limitations on the transactions conducted by the Moscow Exchange established by the
legislation of the Russian Federation, including by the regulatory legal acts of the Bank of Russia,
instructions of the Bank and internal documents of the Moscow Exchange; and
 implementation of measures aimed at preventing illegal use of the proprietary and insider
information, market manipulation, conflict of interests and measures on reduction of risks connected
with performance by the Moscow Exchange of professional activities on the securities market.
After consideration at the meeting of the Supervisory Board of the Moscow Exchange and by the
Chairman of the Executive Board of the Moscow Exchange all copies of the reports are returned to the
ICS with the marks testifying of familiarization of the Chairman of the Executive Board of the Moscow
Exchange with the respective reports. The reports are maintained for at least 5 (five) years.
8. Rules determining access requirements with respect to the persons that may trade on the
Foreign Board of Trade, and the means by which they connect to it.
See Exhibit B-2 of the FBOT Application.
9. The requirement that market participants submit to the Foreign Board of Trade’s jurisdiction
as a condition of access to the market.
See Exhibit B-2 of the FBOT Application.

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 Exhibit G-3

Exhibit G-3
A description of the Foreign Board of Trade’s disciplinary rules, including but not limited to rules that
address the following:
(1) Disciplinary authority and procedures that empower staff to recommend and prosecute disciplinary
actions for suspected rule violations and that provide the authority to fine, suspend, or expel any
market participant pursuant to fair and clear standards.
Any disciplinary sanctions may be imposed on a Trading Participant that has violated any law and other
regulatory acts of the Russian Federation, Exchange’s internal documents or the established dispute
resolution procedure, or failed to fulfill obligations taken while obtaining the membership at the Moscow
Exchange and entering into agreement with it, or failed to comply with resolutions adopted in accordance
with above-mentioned documents. Pursuant to the Admission Rules of the Moscow Exchange’s
Derivatives Market, the Moscow Exchange may impose the following sanctions:
 warning;
 suspension of admission to trading;
 termination of admission to trading.
Warnings are applied to trading participants for the violations provided for in the Moscow Exchange’s
internal documents which entailed no damages to other trading participants and the Moscow Exchange.
The warning shall be announced in writing by the Moscow Exchange’s decision fixing the period for
removal of the discovered violations, as well as specifying the consequences which may occur for the
violator, the trading participant, in case of the trading participant’s failure to remove or to remove in due
time the said violations.
Suspension and termination of admission to trading means the disciplinary measure to be applied to the
trading participants in the cases provided for in the Moscow Exchange’s internal documents by the
Exchange’s decision for the violations provided for in the Exchange’s internal documents.
A Trading Participant’s admission to trading is to be terminated if further participation of such Trading
Participant in the trading process is not possible due to a gross violation of obligations by the Participant,
withdrawal (revocation) of its licenses, declaring the Participant a bankrupt, cessation of the company as
a legal entity and other reasons stipulated in the exchange’s internal documents.
See attached Appendix 10 of the FBOT Application for the Moscow Exchange’s Trading Rules
(Appendix 1 of the Trading Rules for the Regulations on Admission to trading).
Disciplinary measures invoked by the Moscow Exchange shall be applied in accordance with the Moscow
Exchange’s internal documents applicable to all trading participants. The determination as to whether to
apply disciplinary measures may be made by the following bodies:
 Supervisory Board of the Exchange;
 Executive Board of the Exchange;
 CEO of the Exchange or the person authorized by the CEO;
 Exchange’s Disciplinary Committee (in accordance with Provisions of Committee on monitoring the
exchange’s business practices (Disciplinary Committee of the Exchange) and risks of the Moscow
Exchange.
Information on application of the respective disciplinary measures with regard to trading participants for
the violations committed by them shall be disclosed on the Moscow Exchange’s website within 3 (three)
days from the date of the resolution. The trading participant shall be given a written notice of any
disciplinary measure to be applied to it. The notice shall be send no later than one (1) business day after
the date when the Moscow Exchange took the respective decision.
(2) The issuance of warning letters and/or summary fines for specified rule violations.
The warning shall be announced in writing by the Moscow Exchange’s decision fixing the period for
removal of the discovered violations, as well as specifying the consequences which may occur for the
violator, the trading participant, in case of the trading participant’s failure to remove or to remove in due
time the said violations. See also Exhibit G-3 (1) of the FBOT Application.
(3) The review of investigation reports by a disciplinary panel or other authority for issuance of
charges or instructions to investigate further, or findings that an insufficient basis exists to issue
charges.

95

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 Exhibit G-3

Charges may be issued in accordance with the internal regulatory documents of the Moscow
Exchange against any Trading Participant. The decision on issuing charges with account of the
powers stipulated by internal documents may be made by the following authorities:
 Supervisory Board of the Moscow Exchange;
 Executive Board of the Moscow Exchange;
 Chairman of the Executive Board or by a person dully authorised by the Chairman;
 Disciplinary Panel of the Moscow Exchange (in accordance with the Regulations on the
Moscow Exchange’s Practices Surveillance and Risks Committee (Disciplinary Panel of the
Organizer of trading) of the Moscow Exchange’s Supervisory Board).
See Exhibit G-2 (1) of the FBOT Application.
(4) Disciplinary committees of the Foreign Board of Trade that take disciplinary action via formal
disciplinary processes.
Issues connected with application of disciplinary measures are considered by the Disciplinary Committee
of the Moscow Exchange. However, a warning with public notice or termination of access to the Moscow
Exchange may only be issued by the Supervisory Board of the Moscow Exchange, which adopts a
decision on the basis of recommendations of the Disciplinary Committee.
After a suspected violation, the Disciplinary Committee considers the following issues:
 applications received from Trading Participants and from third parties;
 an initiative of the Chairman or any other member of the Disciplinary Committee of the Moscow
Exchange;
 applications of the bodies (authorized persons) of the Moscow Exchange.
The following basic principles underlie the operation of the Disciplinary Committee of the Moscow
Exchange:
 principle of respect of the rights and protection of legitimate interests of the Trading Participants,
other participants of the stock market and third parties;
 principle of strict observance of the legislation of the Russian Federation, standards of professional
activities and professional ethics;
 principle of coordination and interaction of bodies;
 principle of legal equality, judicial protection of legal rights, responsibility only for guilty unlawful
conduct.
In recent years, the Disciplinary Committee has very rarely considered any cases connected with
violations of the standards of professional ethics and requirements of the documents of the Moscow
Exchange, as the systems of control over the Settlement Entities, their transactions and orders
implemented by the Moscow Exchange, as well as the system of risk management used by the Moscow
Exchange prevent the occurrence of conflict situations that may become the subject matter for
consideration of the Disciplinary Committee.
(5) Whether and how the Foreign Board of Trade articulates its rationale for disciplinary decisions.
Disciplinary measures of the Disciplinary Committee are substantiated and reasoned with reference to the
respective requirements of the internal documents of the Moscow Exchange or regulatory legal acts that
were violated.
(6) The sanctions for particular violate ons and a discussion of the adequacy of sanctions with respect
to the violations committed and their effectiveness as a deterrent to future violations.
The Moscow Exchange imposes equal sanctions (penalties) for all Trading Participant committing the
same kind of violations. The Moscow Exchange sends the warning to a Trading Participant committing
any violation stipulated by the Moscow Exchange’s internal documents, if such violation has not entailed
losses to other Trading Participant and the Moscow Exchange. The Moscow Exchange examines each
case of violation individually and in close relation to the committing Trading Participant in order to provide,
inter alia, a reasonable explanation for the sanction to prevent such violations from recurring.

96

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 Exhibit G-4

Exhibit G-4
A description of the market surveillance program (and any related rules), addressing the following:
(1) The dedicated market surveillance department or the delegation or outsourcing of this function,
including general description of the staff; the data collected on market activity of traders; data
collected for determination whether prices are responding to supply and demand; data on the size
and ownership of deliverable supplies
The Moscow Exchange established a department responsible for investigating and preventing abusive,
manipulative, or illegal trading practices. This includes monitoring orders and executed transactions with
the Moscow Exchange-traded derivative contracts, as well as control over the Settlement Entities
exercised in accordance with the requirements of the internal documents of the Moscow Exchange
regulating participation in the trading.
Monitoring and control by the exchange of orders and trades in derivatives contracts are to be considered
as a set of organizational and technical measures aimed to continuous tracking of prices, volumes and
other parameters of orders and trades registered in the trading system during the trading day. Such
parameters include the following:
 control over the current prices of the derivative contracts for the purposes of early detection of
conditions specified by the regulatory legal acts of the Bank of Russia and other regulatory legal
acts of the Russian Federation, upon occurrence of which trading in the derivative contracts is
suspended;
 detection of cases of violation of the legislative acts of the Russian Federation on exchanges and
exchange trading, regulatory legal acts of the Bank of Russia and other regulatory legal acts of the
Russian Federation, requirements of the internal documents of the Moscow Exchange regulating
the organization and holding of the Moscow Exchange trading and trading in the derivative
contracts on Moscow Exchange.
The Moscow Exchange carries out the examination of nonstandard trades for the purpose of detecting:
 illegal use of insider information and/or market manipulation (nonstandard trades or suspicious
deals are detected automatically by special designated system according to “red flags”);
 conflicts of interests (according to internal policy it is prohibited to make any decisions or actions
that may lead to a conflict of interest. Compliance Department must be informed about any conflicts
of interest and gives recommendations how to manage conflicts which can be appeared. There
are Gift Policy and Code of Conduct in place);
 violations by participants of the trading of the requirements of the internal documents of the
Moscow Exchange regulating organization and holding of the Moscow Exchange trading and
trading in the derivative contracts (there is ongoing monitoring of the trading requirements. Periodic
reporting is provided by participants and monitored according to Trade Policy.).
(2) A description of the manner in which the foreign exchange detects and terminates market
manipulation
Nonstandard trades or suspicious deals are detected automatically by special designated system
according to “red flags”. After trades are detected, a special investigation is carried out including a
request to the participant and reporting to the Bank of Russia.
See also Exhibit G-2 (2) of the FBOT Application.
(3) For cash-settled contracts, methods of monitoring the settlement price or value and any foreign
exchange position limit, position management, large trade or other position reporting system
Position limits under the derivative contracts are not established. The possibility of opening of positions
under the derivative contracts is limited neither by the Moscow Exchange, nor by the regulatory authority.
Position limits are not required because the Moscow Exchange will not be offering any “linked contracts”
to US persons.

97

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 Exhibit H(1)

Exhibit H — Information Sharing Agreements among the Comission, the Foreign

Board of Trade, The Clearing Organization, and relevant Regulatory Authorities
Exhibit H(1)
A description of the arrangements among the Commission, the foreign board of trade, the clearing
organization, and the relevant foreign regulatory authorities that govern the sharing of information
regarding the transactions that will be executed pursuant to the foreign board of trade's registration with
the Commission and the clearing and settlement of those transactions. This description should address or
identify whether and how the foreign board of trade, clearing organization, and the regulatory authorities
governing the activities of the foreign board of trade and clearing organization agree to provide directly to
the Commission information and documentation requested by Commission staff that Commission staff
determines is needed:
[To be completed]
(i) To evaluate the continued eligibility of the foreign board of trade for registration.

(ii) To enforce compliance with the specified conditions of the registration.

(iii) To enable the CFTC to carry out its duties under the Act and Commission regulations and to provide
adequate protection to the public or registered entities.

(iv) To respond to potential market abuse associated with trading by direct access on the registered
foreign board of trade.

(v) To enable Commission staff to effectively accomplish its surveillance responsibilities with respect to a
registered entity where Commission staff, in its discretion, determines that a contract traded on a
registered foreign board of trade may affect such ability.

98

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 Exhibit H(2)

Exhibit H(2)
A statement as to whether and how the foreign board of trade has executed the International Information
Sharing Memorandum of Understanding and Agreement.
[To be completed]

99

DC\2654041.3
 Exhibit H(3)

Exhibit H(3)
A statement as to whether the regulatory authorities governing the activities of the foreign board of trade
and clearing organization are signatories to the International Organization of Securities Commissions
Multilateral Memorandum of Understanding. If not, describe any substitute information-sharing
arrangements that are in place.
[To be completed]

100

DC\2654041.3
 Exhibit H(4)

Exhibit H(4)
A statement as to whether the regulatory authorities governing the activities of the foreign board of trade
and clearing organization are signatories to the Declaration on Cooperation and Supervision of
International Futures Exchanges and Clearing Organizations. If not, a statement as to whether and how
they have committed to share the types of information contemplated by the International Information
Sharing Memorandum of Understanding and Agreement with the Commission, whether pursuant to an
existing memorandum of understanding or some other arrangement.
[To be completed]

101

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