MOEX GROUP’S FOCUS AREAS: ‘GREAT’

GENUINE PARTNERSHIP AND ENGAGEMENT WITH THE COMMUNITY

Financial literacy improvement activities

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Improving the financial literacy of novice investors is a priority of Moscow Exchange Group’s ESG strategy. By pursuing this objective, Moscow Exchange can make a significant contribution to achieving sustainability goals.

Investing is an active form of participation that professional portfolio managers, traders, and the public engage in to develop the modern economy. This includes green financial instruments, which have not only an environmental, but also a social effect. Successful ESG transformation of financial markets largely hinges on the availability of training for market participants.

In order to make investing activities more attractive for individual investors and raise their awareness of the ESG agenda, Moscow Exchange conducts specialized activities, training seminars, and competitions, as well as large-scale financial education projects. It also organizes contests to demonstrate the benefits of an informed approach to trading.

• The Moscow Exchange School has been running since 2014. The materials, video courses, and webinars published on the project’s web page help novice and experienced investors understand the stock exchange and how to settle trades effectively and with confidence.
• The Investor’s Path training course. Moscow Exchange has developed a free training course for novice investors based on the methodology of the International Organization of Securities Commissions (IOSCO); the course is accredited by the Financial Literacy Association.
• The Invest Trial contest has been held since 2015. Participants acquire investing experience in a demo mode (without the risk of losing their own money), and the winners receive cash prizes.
• The Best Individual Investor contest has been held since 2003 and is the world’s largest exchange competition for traders.
• Moscow Exchange is the general partner of Fincontest, or the All-Russian Financial Markets Knowledge Contest, which has been held annually by the Financial University under the Government of the Russian Federation since 2009.
• Moscow Exchange Group supports projects of the Central Bank of Russia and the Russian Ministry of Finance to develop financial skills and awareness and improve the financial literacy of the public.

The following activities were held in 2021 to improve financial literacy:

• webinars for individual investors;
• contests and “marathons” (Investmarathon, Invest Battle Championship);
• educational programs (the Telegram channels MOEX – Moscow Exchange and Moscow Exchange School; the Money Makes Money podcast).

Promoting gender balance and equality in the professional community

Moscow Exchange Group is a party to the global Ring the Bell for Gender Equality This initiative is a partnership of a number of international organizations, including the UN Global Compact and the Sustainable Stock Exchange Initiative. initiative. Every year on the 8th of March, participating exchanges ring bells at opening or closing of trading as a gesture to promote the principles of gender equality and the empowerment of women in business, politics, and the economy. The main goal of this initiative is to urge businesses to take measures to promote sustainability goals through the empowerment of women. In particular, the role of exchanges involves promoting gender equality among companies whose shares are listed on their floors and in calling for adherence to the Women’s Empowerment Principles (WEP).

Information about Moscow Exchange Group’s adherence to the principle of no discrimination and gender equality in regards to its employees is provided in the subsection “Environment of respect and empowerment” of the section “2021 Sustainability Performance Highlights”.

Investments in communities and charity projects

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Moscow Exchange’s charity activities aim to address important social issues in those areas where it has strong competencies or strategic interests. It also sponsors external projects to strengthen relationships with customer groups and professional and business communities, and also to develop the Russian financial market. The Group’s largest corporate donors are Moscow Exchange and the National Settlement Depository.

Moscow Exchange develops, selects, and implements charity programs and projects in accordance with its Charity Policy, which sets out the principles, priority areas, and procedures for interacting with partners. Priority areas of the charity program include:

• supporting the education and upbringing of children;
• helping disaster victims in Russia;
• supporting veterans and the elderly.

In the beginning of 2022, Moscow Exchange set new priorities for its charitable activities:

• educational initiatives for people of all ages, aimed at improving the financial, investment, and technological literacy of the public;
• support for educational institutions of all levels, educators and students (e.g., through grants and scholarships), research and popular science, and publications in the fields of finance, economics, and technology;
• assisting children, the economically disadvantaged, people who have found themselves in difficult situations (by helping them get back to an active life and find a decent job), and WWII veterans;
• programs that promote stewardship of the environment among companies and individuals; programs that protect biodiversity and encourage the development of renewable energy sources;
• programs that raise awareness among individuals and organizations of the importance of socially responsible behavior and participation in charitable activities; programs that support and develop volunteering:
  • corporate volunteering, i.e., the involvement of Group employees in charity activities, which includes cash donations by employees.

A Charity Committee has been established, which is responsible for planning, analyzing, and evaluating projects, as well as for issuing opinions and recommendations to the Executive Board and the Chairman of the Executive Board of Moscow Exchange when selecting applicants to participate in charity programs.

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The effectiveness of charitable activities is evaluated using feedback from partners and beneficiaries, obtained through email in the form of a report from the charities involved.

Moscow Exchange cooperates with a number of reputable charitable foundations, thereby ensuring transparency and effectiveness of the allocated funds, while also increasing the number of end beneficiaries.

New projects are considered by the Charity Policy Committee based on the following criteria:

• alignment with Moscow Exchange’s strategic priorities;
• significance in achieving the UN Sustainable Development Goals, national priorities, and other initiatives and partnerships in which Moscow Exchange is a member;
• the positive impact of the charity programs;
• the ability of the beneficiaries to continue to implement qualitative changes after the program’s completion;
• the absence of compliance risks and negative information about the beneficiaries.

Moscow Exchange seeks to ensure that all companies of the Group act in accordance with the Charity Policy and harmonize the principles and approaches used in their charitable activities with it.

Moscow Exchange does not support organizations that discriminate based on gender, sexual orientation or nationality, nor does it participate, directly or indirectly, in financing organizations whose activities involve human rights violations, the creation or proliferation of weapons of mass destruction, or projects that pose a risk of environmental pollution.

Corporate volunteering

Volunteering is an important aspect of the corporate culture of Moscow Exchange Group: it brings staff together by fostering common values. Moscow Exchange employees can participate in partner projects as volunteers or donors.

Employee participation in charity projects is encouraged, including by the use of an internal “currency” (a description of the MEMS project is provided in the subsection “Environment of respect and empowerment” of the section “Sustainability Approaches and Procedures”).

Employees receive information about charity events in the “Company News” weekly morning newsletter; they can also find about charitable activities on the special Corporate Charity page on the intranet. There, staff can apply to participate in volunteer events, make donations, or post announcements about alternative charitable projects in order to find like-minded people.

Interaction with stakeholders, partnerships, and associations

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Moscow Exchange Group actively works to build constructive dialogue with Russian and foreign investors, market participants, current and potential issuers, regulators, and professional communities. It pursues this by engaging in direct communication through advisory bodies, working groups, investment conferences, forums, and specialized training events. These efforts help attract new investors to the Group’s markets, thereby expanding the client base, increasing the liquidity of financial markets, and bringing an inflow of investment to the Russian economy.

Many areas of Moscow Exchange’s activities involve interacting with government authorities; these relations are supervised by the Managing Director for Interaction with Issuers and Government Authorities.

The Moscow Exchange Council and user committees

The Moscow Exchange Council is the organization’s main consultative and advisory body. Its objective is to elaborate strategic proposals for developing the Russian financial market and to represent trade participants and consumers of Moscow Exchange’s services so that their needs can be fully taken into account. The Moscow Exchange Council is made up of members of management of leading market participants, heads of self-regulated organizations, and representatives of management companies, investment banks, and the Central Bank of Russia.

The Exchange Council has the following competencies:

• elaborating proposals and providing recommendations to the Supervisory Board on how to improve Moscow Exchange Group’s development strategy;
• discussing priority projects and selecting at least one project to be used as a KPI for the management of Moscow Exchange, as well as providing relevant recommendations to the Supervisory Board or other competent management bodies;
• developing proposals to improve the exchange’s infrastructure and clearing technologies, and to attract market participants from new client segments and other areas, and providing recommendations to the Supervisory Board or other competent bodies.

Moscow Exchange Group interacts with market participants via user committees. Through these committees, Moscow Exchange Group gathers feedback from clients on planned innovations to products and services, improves its exchange infrastructure, and prepares proposals for amending financial market regulations.

The user committees are advisory bodies made up of stakeholder representatives. Committee members give recommendations to management bodies of Moscow Exchange on its strategic development and operations in certain markets. The user committees and the Exchange Council were created pursuant to Federal Law No. 325-FZ “On Organized Trading”.

As of 31 December 2021, Moscow Exchange had the following user committees:

• Committees created pursuant to legislative requirements Consultative and advisory bodies of Moscow Exchange created pursuant to Article 10 of Federal Law No. 325-FZ dated 21 November 2011 “On Organized Trading” and Central Bank of Russia Regulation No. 437-P dated 17 October 2014 “On Conducting Organized Trading.” :
  • Foreign Exchange Market Committee
  • Derivatives Market Committee
  • Repo and Securities Lending Committee
  • Stock Exchange Committee
  • Fixed-Income Securities Committee
  • Deposit Market Committee
  • Credit Market Committee
• Committees created at the initiative of Moscow Exchange:
  • Exchange Council
  • Settlements and Transaction Documentation Committee
  • Collective Investment Market Committee
  • Share Issuers Committee
  • Bond Issuers Committee
  • Primary Market Committee;
  • Index Committee
  • Debt Market Indicators Committee
  • Information Technology Committee
• Committees under the National Settlement Depository:
  • Quality and Risk Committee
  • Committee on Settlement and Depository Activities and Tariffs
  • Committee on Interaction with Registrars and Depositories
  • Central Depository Services Users Committee
  • Repository Services Users Committee

Most of the committees feature members who are professional market participants: banks, brokers, investment companies, issuers, and non-finance companies. They are appointed for a term of one year.

Members prepare proposals for amending legislation and improving the regulatory framework, and also review issues of regulation of public circulation and issuance of securities, information disclosure and corporate governance. The committees also elaborate proposals for process solutions to improve the organization of exchange trading, clearing and settlements, and the expansion of tools and services.

For the convenience of everyone involved, Moscow Exchange publishes a monthly user committee digest containing a list of issues considered at meetings of the Exchange Council and the user committees, as well as the decisions taken. Information on the work of the committees is available to the public on the websites of Moscow Exchange and the National Settlement Depository.

Sustainability initiatives and partnerships

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In keeping with its mission and corporate values, Moscow Exchange participates actively in various Russian and international organizations, associations, and voluntary initiatives.

• Moscow Exchange is a regular participant of the Ring the Bell for Financial Literacy initiative of the World Federation of Exchanges. It also participates in the global Sustainable Stock Exchanges (SSE) initiative, which was launched in 2009 at the initiative of former UN Secretary-General Ban Ki-moon. It is a partner program of the UN Conference on Trade and Development (UNCTAD), the UN Global Compact network, the UN Environment Programme Finance Initiative (UNEP FI), and the Principles of Responsible Investment (PRI).
• Moscow Exchange Group participates actively in numerous working groups on sustainable financing and responsible investing together with other market participants and regulators. One example is an initiative to encourage best practices in business ethics, compliance, and anti-corruption by the Russian Association of Business Ethics and CSR (Russian Business Ethics Network, RBEN).

Interaction with market participants and regulators

Moscow Exchange Group holds conferences, roundtable discussions, and seminars involving various partners from the corporate and public sectors. At these events, participants discuss legislative developments, IR trends, and topics pertinent to sustainability.

Key events in the field of corporate governance and investor relations include a yearly annual report competition, which is held by Moscow Exchange together with the RCB media group. The competition contributes to making public companies more transparent and disclosures more useful for investors and customers.

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Stakeholder groups, areas, and forms of interaction

Stakeholders are interviewed every two years to rank important topics and prepare sustainability reports. The stakeholder interviews were last conducted in 2020. The next cycle of interviews is planned for 2023.

Enhancing the professionalism of the investor relations (IR) community

Moscow Exchange operates the MOEX IR Academy, a platform for dialogue within the IR community that encourages the exchange of opinions between professionals. It also serves as a discussion club and a center for the development of professional principles and standards in the field of IR.

In 2021, Moscow Exchange and MOEX IR Academy supported the organization of webinars on non-financial information disclosure under the TCFD climate standard for Russian businesses. Particular attention was paid to the energy, agriculture, and pulp and paper industries; disclosure of climate data for issuers was also discussed.

Moscow Exchange helped organize several webinars on responsible investment: “ESG Factors in the Strategies of Issuers and Financial Organizations: Practical Aspects of Lending, Formation of Funds, and Individual Trust Management” The webinar “ESG Factors in the Issuers’ and Financial Organizations’ Strategies: Practical Aspects of Crediting, Formation of Funds, and Individual Trust Management” was organized by the National Rating Agency (NRA) and InfraGreen, and was held on 16 February 2021. ; “Development of New Market Instruments for Responsible Financing in Russia”; The webinar “Development of New Instruments of the Responsible Financing Market in Russia” was organized by the Central Bank of Russia and held on 9 April 2021. “Launching a Sustainable Financing Market”, “ESG Rating: Guidelines for Regions” The webinar “Launching the Sustainable Financing Market, ESG Rating: Guidelines for Regions” was organized by Expert RA and held on 21 June 2021. ; “ESG Ranking Methodology. The Difference between Ranking and Rating” The webinar “ESG Ranking Methodology. The Difference between Ranking and Rating” was organized by the National Rating Agency (NRA) and held on 14 September 2021. .

In 2021, Moscow Exchange took part in 11 webinars aimed at enhancing the professionalism of the IR community through responsible investing and non-financial information disclosure. In total, 1,293 people joined the webinars.

At the end of 2021, Moscow Exchange held the first meeting of the MOEX IR Club, gathering together IR teams of various Russian issuers. The event was organized by the Issuer Relations Department.

Developing partnerships with institutions of higher education

Moscow Exchange cooperates with leading universities to ensure the availability of high-skilled, well-trained personnel for the Group and the financial industry. It also works to promote the implementation of research projects in the fields of economics and technology.

Moscow Exchange cooperates closely with the Higher School of Economics, the New Economic School, Lomonosov Moscow State University, the Financial University under the Government of the Russian Federation, Plekhanov Russian University of Economics, and the MEPhI National Research Nuclear University. Together with these institutions, Moscow Exchange conducts research on the securities market, IT, and risk management. It creates special software to train young specialists.

Through career guidance programs, students are given the chance to apply for an internship at Moscow Exchange Group in their field of interest. Group employees help them implement their projects. Information on internships at Moscow Exchange Group is published on its careers page. The Group also actively develops special educational programs where senior managers and leading specialists of the Group’s companies give master classes for students. Additional information on the internship program in 2021 can be found in the section “2021 Sustainability Performance Highlights.”

In 2018, with the support of Moscow Exchange, Higher School of Economics created a basic Department of Financial Market Infrastructure at the Faculty of Economics, which brings together HSE professors and employees of Moscow Exchange. Moscow Exchange also helps the Financial University run the Securities and Financial Engineering master’s program. Sponsor support is provided to the Cybernetics Department of the Institute of Intelligent Cybernetic Systems at MEPhI National Research Nuclear University, which, in turn, implements the department’s curricula and consults students on their diploma projects and research in the interests of Moscow Exchange.

Moscow Exchange, together with the Financial University, organizes Fincontest, a specialized knowledge contest about financial markets that was first launched several years ago. Moscow Exchange helps assess the participants’ knowledge in the areas of corporate finance, securities markets, and financial analysis. It provides contestants with the chance to start their professional career.

Moscow Exchange participates in the Novosibirsk Region Governor’s Cup for On-exchange Financial Market for students of Russian universities.

Participation in initiatives and associations in 2021

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Moscow Exchange Group Company	Item	Initiative/Association Title
Sustainability initiatives
	1	UN Global Compact (support of the principles)
	2	WFE Sustainability Working Group
	3	WFE Cyber Security Working Group
	4	WFE Operational Risk Working Group
	5	UN Sustainable Stock Exchanges (SSE) initiative
	6	Ring the Bell for Gender Equality
	7	Ring the Bell for Financial Literacy
	8	CPMI–IOSCO Principles for Financial Market Infrastructure (evaluation of conformity to the principles by the Group’s companies)
	9	Association for Improvement of Financial Literacy
Other significant associations and initiatives
	1	World Federation of Exchanges (WFE)
	2	Futures Industry Association (FIA)
	3	International Association of Exchanges of Countries of the Commonwealth of Independent States (CIS)
	4	Russian National SWIFT Association (ROSSWIFT)
	5	Financial Technology Development Association
	1	European Central Securities Depositories Association
	2	Association of Eurasian Central Securities Depositories
	3	International Securities Services Association (ISSA)
	4	Russian National SWIFT Association (ROSSWIFT)
	5	Self-Regulated Organization National Finance Association (SRO NFA)
	1	Global Association of Central Counterparties
	2	European Association of CCP Clearing Houses – Central Counterparties (EACH)