BCS are primarily known as a retail broker in Russia where the local market is dominated by small investors, but are making a big push to become an institutional brokerage. Last year they hired Stas Stanislav as head of of prime brokerage and electronic trading and Mike Smith as head of international sales from Russian brokerage Renaissance Capital. Speaking at Tradetech Emerging Markets Surikov was keen to marry the increasing institutional liquidity flooding into the Russian market with their large retail flow.
Currently much of the liquidity for Russian stocks flows to the international order board (IOB) at the London Stock Exchange where overseas companies can list depostitary receipts (DRs). Whilst numerous DRs are currently represented more than 95% of current volume is now accounted for by Russian Stocks. MICEX-RTS, the Russian exchange which merged in December 2011 is hoping to attract some of this liquidity not least by making changes to its unpopular T+0 settlement requirements and the creation of a CCP both of which it claims will be functioning by mid-November 2012. Increasingly high frequency traders have been taking advantage of arbitrage opportunities between the two venues creating significant opportunities for those brokers who can offer access to both markets. MICEX recently announced that about 25% of equity trading volume on their exchange was now accounted for by high frequency traders. Otkritie are currently ranked number one for both the IOB and LSE.
