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 Practitioners at the heart of the securities industry

  NSD:  Pricing for new corporate actions services

Business Challenge


NSD is the Russian Central Securities Depository (CSD).  It is implementing a new corporate actions model that centralises and standardises processing, giving firms the opportunity to automate end-to-end processing.  This is supported by changes to legislation and means significant changes to existing Russian financial market infrastructure practices.


The tariffs for the new services need to cover NSD's investment and running costs, be fair and equitable (recognising the costs and benefits across the market value chain), and be consistent with international market charging.


To agree these tariffs with the industry, NSD needed to be able to demonstrate that the process for collecting and analysing the necessary data was transparent, robust, and complete.  To help it achieve this, NSD conducted a thorough Request for Proposal selection process and chose Elkhorn Consulting Limited.


Solution Approach


The approach agreed by Elkhorn and NSD to develop the tariff model covered:

  • Structured stakeholder engagement to understand the benefits and disadvantages for each market participant type (issuers, registrars, CSD participants, investors)

  • Tariff data collections and interviews with other market providers to enable a like-for-like comparison

  • Agreeing pricing principles

  • Developing a spreadsheet model of the message flows for each corporate action type to model revenues using different assumptions and to indicate how prices compared to other markets


The Elkhorn team for this assignment included Iain Saville, CBE.  Iain is a global expert in transforming post-trade processing: he built CREST (1) (including pricing), and developed it to settle all major UK securities and depositary interests in foreign securities; he was CEO for EMEA of Computershare Registrars; and more recently spent five years at the European Central Bank designing key features (including pricing) of T2S (2), and governing its build, marketing, legal structure and pricing as a member of the Programme Board.




This assignment needed a small team with the ability and subject matter knowledge to quickly understand the proposition and engage effectively and credibly with market participants, both in the local market and abroad.


These skills, along with experience of building pricing models and processing Corporate Actions in other markets, allowed the team to successfully collect, evaluate and agree the information needed to deliver the structured analysis that NSD and its participants required.


Outcome and Business Benefit


Elkhorn presented the results of the analysis to the NSD market participants in order to

  • Obtain agreement that the benefits and disadvantages for each market participant type had been identified correctly

  • Share information on the pricing principles, tariffs in other markets, and potential NSD fee models and charges


This approach was successful.  It allowed NSD and its participants to focus their discussions on agreeing tariffs based on a shared understanding of the requirements, constraints, benefits and costs across the market value chain.


The project was completed on time and within the agreed budget.


(1) CREST is the UK CSD and provides real time gross settlement in central bank money; this includes an innovative and simple resource-based pricing model for all CSD outputs to clients

(2) T2S is the new settlement engine for (initially) all Eurozone securities, settling in central bank money.  Much of its functionality and its pricing principles build on the innovations of CREST