Public Joint Stock Moscow Exchange MICEX RTS : Annual report of Moscow Exchange 2021

MOEX.COM

WHERE INVESTMENTS START

ANNUAL REPORT 2021

01	6
Moscow Exchange
in brief	4
Business model
Statement from the Chairman
of the Supervisory Board	8
Statement from the Chief Executive Officer	10
Strategic report	12
Main trends in the development
02of the sector	13
Mission and corporate values	17
Priority areas of Moscow Exchange	18
Key projects in 2021	19

03
Financial results review 22
Financial results review	23
Market performance	27
Post-trade services	41
Information products and services	47
Client services	50
Information technologies	51
Compliance	53
Human resources	54
Moscow Exchange and the community	57

Corporate governance	60
Corporate governance system	61
management	90
04Risk
Information for investors	98
05Key	104
Appendices
Information on major transactions
and interested-party transactions	105
performance indicators	105

Report on Moscow Exchange Compliance
with the Principles and Recommendations
of the Corporate Governance Code	106
Report on the Adherence to the Moscow
Exchange Corporate Governance Code	142
Contacts	151
Consolidated Financial Statements	152

CONTENTS

APPROVED BY THE ANNUAL GENERAL SHAREHOLDERS MEETING OF THE MOSCOW EXCHANGE ON JUNE 6, 2022, MINUTES № 64

MOSCOW EXCHANGE IN BRIEF	STRATEGIC REPORT	PERFORMANCE REVIEW	CORPORATE GOVERNANCE	APPENDICES

01

MOSCOW EXCHANGE IN BRIEF

Moscow Exchange Group (the Group) operates Russia's only multifunctional trading platform for equities, bonds, derivatives, currencies, money market instruments

and commodities.

The Group is comprised of:

• Public Joint-Stock Company Moscow Exchange MICEX-RTS (the "Moscow Exchange", the "Exchange" or "MOEX" which operates the Equity & Bond Market, Money Market, Derivatives Market as well as FX Market and Precious Metals Market;
• NCO JSC National Settlement Depository (NSD), the central securities depository;
• JSC Non-Banking Credit Institution - Central Counterparty National Clearing Center (CCP NCC, or NCC), operating as clearing house and a central counterparty for all MOEX's markets;
• JSC National Mercantile Exchange (NAMEX), which operates the Commodities Market;
• MOEX Innovations, which develops innovative technologies and works with fintech start-ups.

Moscow Exchange holds majority stakes in all key subsidiaries, including a 100% stake in NCC, a 99.997% stake in the NSD and, directly and indirectly, a 88.25% stake in the NAMEX.

Moscow Exchange was formed in December 2011 from a merger of Russia's two main exchange groups: MICEX Group, the oldest domestic exchange and operator

of the leading equity, bond, foreign exchange and money markets in Russia; and RTS Group, which operated Russia's leading derivatives market. This combination created a vertically integrated exchange for trading

of all major asset classes. In February 2013, Moscow Exchange completed an initial public offering on its own platform (ticker: MOEX). As of 31 December 2021, the company's market capitalization was RUB 348 billion, and the free float was 63%.

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MOEX.COM | ANNUAL REPORT 2021

BUSINESS MODEL

MOSCOW EXCHANGE IN BRIEF	STRATEGIC REPORT	PERFORMANCE REVIEW	CORPORATE GOVERNANCE	APPENDICES

MARKET DATA

CLIENTS

MARKETS

EQUITY & BOND

■

Russian and foreign shares

MARKET

■

Sovereign bonds (OFZ)

Trading

■

Bank of Russia bonds

74,500

■

Regional and corporate bonds

volumes,

■

Sovereign and corporate Eurobonds

RUB trln

■

Mutual funds and Russian-law ETFs

■

Exchange-traded funds (ETFs)

■

Depository receipts

■

Mortgage participation certificates

Legal entities

DERIVATIVES

Futures and options on:

MARKET

■

Indices (MOEX Russia Index, RTS Index, RVI)

Trading

■

Russian and foreign shares

■

OFZ and sovereign Eurobonds

volumes,

■

Currency pairs

RUB trln

1,711

■

Interest rates (RUSFAR, RUONIA)

■

Oil and gas

■

Precious and non-ferrous metals

■

Wheat and sugar

Professional

FX MARKET

■

USD - RUB

■

USD - CHF

trading participants

SERVICES

■

EUR - RUB

■

JPY - RUB

Trading

■

EUR - USD

■

USD - JPY

■

CNY - RUB

■

TRY - RUB

volumes,

■

USD - CNY

■

USD - TRY

RUB trln

■

HKD - RUB

■

BYN - RUB

16.8

CLIENT

■

GBP - RUB

■

KZT - RUB

■

GBP - USD

■

USD - KZT

■

CHF - RUB

MONEY

mln

■

Repo with the CCP

MARKET

■

GCC repo

Trading

Retail investors

■

Inter-dealer repo

■

Direct repo with the CBR

volumes,

■

Repo with collateral management system

RUB trln

■

Deposit operations with the CCP

■

Deposit and credit operations

COMMODITIES

■

Gold

MARKET

■

Silver

Trading

■

Wheat

volumes,

RUB bln

2021

2020

2019

2021

2020

2019

2021

2020

2019

2021

2020

2019

2021

2020

2019

52.4

54.5

40.7

158.0

129.0

82.4

319.8

329.0

308.3

474.0

426.8

346.3

223.8

78.0

85.8

Fee & commission income

Equity Market	Bond Market
2021		2021
▲23.0 %		▼17.4 %
2020		2020
▲86.7 %		▲15.3 %
2019		2019
▲17.2 %	▲17.4 %

2021

▲31.9 %

2020

▲38.1 %

2019

▲23.0 %

2021

▼2.0 %

2020

▼20.5 %

2019

▲11.1 %

2021

▲35.8 %

2020

▲23.4 %

2019

▲9.2 %

Post-trading Services
■	Clearing (NCC)	Depository
■	Depository and	and settlement
	settlement	services

services (NSD)

2021

▲28.7 %

2020

▲24.8 %

2019

▲15.4 %

OPERATING

INCOME

41,554.0

RUB mln

Fee & commission income

12,902.2

RUB mln

Interest income

412.7

RUB mln

Other operating income

54,868.9

RUB mln

Total

6

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MOEX.COM | ANNUAL REPORT 2021

STATEMENT FROM

THE CHAIRMAN

OF THE SUPERVISORY BOARD

MOSCOW EXCHANGE IN BRIEF	STRATEGIC REPORT	PERFORMANCE REVIEW	CORPORATE GOVERNANCE	APPENDICES

Dear shareholders,

I am pleased to present you with the 2021 report of the Supervisory Board of Moscow Exchange.

The past year 2021 was a year of strong global and Russian economic recovery and high capital market activity, which had a positive impact on Moscow Exchange's business. However, the risks of an ongoing pandemic remained high, and we had to continue operating under administrative restrictions on public events and transport logistics. For these reasons,

the activities of the Supervisory Board and the Board committees took place predominantly remotely. This did not prevent the Supervisory Board from holding in-depth discussions and adopting a number of crucial decisions aimed at supporting the company's business development and expansion, improving the quality

of risk control and information security, ensuring the transformation of corporate culture to increase employee initiative and responsibility, and developing sourcing in the IT field. Particular attention was paid

to implementing the transformation plan for the National Clearing Centre and establishing competence centres across the Group, supporting management initiatives in the area of innovation and transition to a flexible office, adopting a clearing strategy and considering strengthening the Group's risk management, internal audit and compliance controls. Much attention was given to succession planning for the senior management team as well as the Supervisory Board itself.

The Annual General Meeting 2020, which elected the ­current Supervisory Board, took place at a time of acute pandemic development in the country and the world. For this reason, it was held

in absentia. At the same time, shareholders were given the opportunity to read the speeches of the company's management online and to ask questions as part of the traditional Shareholders' Day, which took place in the form of a video conference. On the recommendation of the Supervisory Board, 85% of the consolidated net profit under IFRS for 2020 was allocated for dividends. The Annual General Meeting for 2021 will also be held in absentia. Individual shareholders of the Exchange, whose number exceeds 370,000, will be able to use the E-voting service developed by National Settlement Depository, part

of the Moscow Exchange Group, to vote at the meeting.

Moscow Exchange achieved record operating

and financial results for 2021. The continued inflow of private investors, intensification of the IPO market, expansion of trading hours, and launch of new products and services all resulted in record trading volumes and fee income.

The Supervisory Board recommended that shareholders abstain from approving an annual dividend distribution for the year 2021. This decision rests on the current dividend policy, which stipulates the primacy

of compliance of Moscow Exchange companies with regulatory requirements for capital allocation over dividend distribution. We consider the current high burden on capital of the Group's subsidiaries as temporary. Moscow Exchange's dividend policy remains ­unchanged. The Supervisory Board continues to assess the situation and intends to resume discussions around dividend payments later in 2022.

The composition of the Supervisory Board of the Moscow Exchange to be elected at the 2022 Annual General Meeting of Shareholders is planned to be substantially renewed. This will concentrate expertise in financial infrastructure, as well as retail and digital products. Moscow Exchange continues to follow best practices

in corporate governance. Under the proposed composition, independent directors should comprise more than

a third of the Supervisory Board. In order to improve the efficiency of the Supervisory Board, the Annual General Meeting will be asked to reduce the number of members to nine.

In conclusion, I would like to thank all of the members of the Supervisory Board who were on the previous Supervisory Board for their great contribution

to the ­development of the company and for their active involvement in the work of the Supervisory Board.

I would like to acknowledge the friendly and highly

professional­ work of all employees and especially

the ­contribution of the Group's management, which made it possible to achieve outstanding results and create a ­good foundation for the future.

In conclusion, I would like to thank Moscow Exchange's clients and shareholders for their trust, support and effective cooperation in developing the Russian financial market.

Chairman of the Supervisory Board

Oleg Viyugin

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